Setting up and running a company in India

Full guide · Source-checked research98% of statements checked against a source107 checked against an official source34 checked against a secondary sourceChecked 2026-10-19Not yet professionally reviewed

• Foreign investment under the automatic route does not need prior approval of the RBI or the central government, while investment under the government route needs prior government approval and must follow the conditions of that approval.

  Applies by sector under the Consolidated FDI Policy and the FEMA (Non-debt Instruments) Rules, 2019. Central rule.Department for Promotion of Industry and Internal Trade (DPIIT), Foreign Investment Facilitation Portal · checked 2026-10-18

• Foreign direct investment is prohibited in lotteries, gambling and betting, chit funds, Nidhi companies, trading in transferable development rights, real estate business or construction of farmhouses, manufacture of cigars and cigarettes, and activities not open to private investment such as atomic energy and most railway operations.

  Para 5.1 of the Consolidated FDI Policy. Central rule.Department for Promotion of Industry and Internal Trade (DPIIT), Foreign Investment Facilitation Portal · checked 2026-10-18

• An entity of a country sharing a land border with India, or an investment whose beneficial owner is linked to such a country, can invest only under the government route, and a later transfer that brings beneficial ownership within this category also needs government approval.

  Press Note 3 (2020 Series) dated 17 April 2020, as revised in 2026; subject to the 10% non-controlling exception in in-establish-004. Central rule.Department for Promotion of Industry and Internal Trade (DPIIT), Foreign Investment Facilitation Portal · checked 2026-10-18

• Investors whose beneficial ownership from land-border countries is non-controlling and no more than 10% may invest under the automatic route, subject to sectoral caps, entry routes and conditions, with the investee reporting the relevant details to DPIIT.

  Beneficial ownership is defined using the criteria of the Prevention of Money-laundering Rules, 2005 and tested at the level of the investor entity. Central rule.Prime Minister's Office (pmindia.gov.in) · checked 2026-10-18

• Government-route FDI proposals are filed online on the Foreign Investment Facilitation Portal and assigned by DPIIT to the competent administrative ministry, with an indicative cumulative processing timeline of 12 weeks that excludes time taken by the applicant to supply information.

  Standard Operating Procedure dated 4 May 2026; DPIIT has two further weeks for proposals proposed for rejection or extra conditions. Central rule.Department for Promotion of Industry and Internal Trade (DPIIT) · checked 2026-10-18

• A private company must have at least two directors, a public company at least three and a one person company one, with a maximum of fifteen unless more are approved by special resolution.

  Section 149(1), Companies Act, 2013. Central rule.Institute of Company Secretaries of India (ICSI) · checked 2026-10-18

• Every company must have at least one director who has stayed in India for a total period of not less than 182 days.

  Section 149(3), Companies Act, 2013. Applies to foreign-owned subsidiaries. Central rule.Institute of Company Secretaries of India (ICSI) · checked 2026-10-18

• SPICe+ is the Ministry of Corporate Affairs' integrated web form for incorporating a company, with Part A for name reservation and Part B covering incorporation, director identification numbers, PAN and TAN, EPFO and ESIC registration, GSTIN and opening a bank account, filed with linked eMoA, eAoA and AGILE-PRO-S forms.

  Professional tax registration through the form applies to new companies in Maharashtra and Karnataka only (a state-level registration). Central filing.Ministry of Corporate Affairs · checked 2026-10-18

Read the full guide: Entry, investment and company formation