Setting Up or Investing in India: Post-Incorporation Compliances for Foreign-owned Companies

Foreign companies enter India as a Wholly Owned Subsidiary, a majority-owned Subsidiary, or a minority-held Associate/Joint Venture (20-50%, "significant influence" under Sec 2(6) or >50% control under Sec 2(87), Companies Act 2013). Whatever the structure, a defined set of post-incorporation compliances begins the moment the company is incorporated and foreign capital comes in.

COMMON TO ALL STRUCTURES (WOS, Subsidiary, Associates, JV)

Companies Act

* First Board Meeting within 30 days; first Statutory Auditor (ADT-1) within 30 days

* Declaration for Commencement of Business (INC-20A)

* Significant Beneficial Owner disclosure (BEN-2), tracing ownership to the natural person behind the foreign investor

FEMA / RBI

* Form FC-GPR within 30 days of allotment, with a fair valuation certificate (Rule 21, NDI Rules)

* ISIN + dematerialization of shares via a SEBI-registered RTA (now mandatory for private companies), with half-yearly PAS-6 filings

* Demat Account for the foreign investor (NSDL/CDSL)

* Annual FLA Return to RBI by 15 July, every year FDI remains outstanding

STRUCTURE-SPECIFIC

* WOS: where a nominee shareholder is used, Form MGT-6 is required within 30 days of the MGT-4/MGT-5 declarations

* Subsidiary/Associate/JV with an Indian partner: Shareholders' Agreement terms should be built into the Articles of Association; dealings with the associate/JV partner are Related Party Transactions (Sec 188); a share-transfer-based JV needs Form FC-TRS (60 days) instead of/in addition to FC-GPR; sectoral caps, entry route and the Press Note 3 government-route rule (land-border investors) should be reconfirmed upfront

Also needed across the board: PAN, TAN, GST, Professional Tax, Shops & Establishment, EPFO/ESIC registrations, and statutory registers/share certificates in order from day one.

Most of these carry hard 30 or 60-day timelines. The lapses I see most often: delayed FC-GPR/FC-TRS filings, incomplete BEN-2 disclosure, and JV terms never reflected in the Articles.

I advise foreign holding companies and their Indian subsidiaries, associates and JVs on incorporation, FEMA-RBI reporting, ROC compliance and ongoing company secretarial support, end to end. If you're setting up in India, structuring a JV, or due for a compliance health-check, I'd welcome a conversation.

Sandeep Lakhotia

Practicing Company Secretary | 28+ years advising on India-entry, thru’ subsidiaries, associates and joint ventures