Answer five questions for a recommended India entry route. The short version: a wholly-owned subsidiary (Pvt Ltd) is the default for operating, hiring and earning long-term — full control, can contract/invoice/raise/ESOP, ~25% tax, no RBI permission to form. A liaison office only explores the market (no income); a branch office earns income as an extension of the parent (RBI approval, 5-yr track record); a project office executes one Indian contract; an LLP fits 100%-automatic-FDI advisory work; and an EOR hires a team in under 2 weeks with no entity. Full comparison below.
Find Your India Entry Route
Five questions weigh objective, income, FDI route, speed & permanence. Educational guide, not FEMA advice.
Recommended Route
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Want this route confirmed and set up?
A Chartered Accountant pressure-tests the route against your sector’s FDI rules and handles incorporation or the RBI/FEMA route end to end.
Set your primary objective — full operations, market exploration, a single project, or just hiring a team.
Answer the income, FDI, speed and permanence questions — these are what separate the routes legally.
Press Recommend a Route for a ranked verdict, score bars across all six options, and the reasons it leaned that way.
Cross-check against the comparison matrix below, and remember most permanent operating businesses end up at a wholly-owned subsidiary.
CA Tip: A common play is to start with an EOR for speed while incorporating a subsidiary in parallel, then move the team across once the entity is live. Already know you want a company? Compare structures with the Pvt Ltd vs LLP tool.
The Six Entry Routes Explained
Wholly-Owned Subsidiary (Private Limited)
A separate Indian legal entity, up to 100% foreign-owned, that can contract, hire, invoice, raise funding and grant ESOPs. It gives the parent full control, carries the lowest corporate tax among revenue-generating entities (~25%), and is formed with the Registrar of Companies — no RBI permission needed to incorporate, subject to sector FDI rules. The default long-term vehicle for MNCs and Global Capability Centres.
LLP
Allowed for FDI under the automatic route only in sectors with 100% FDI and no performance-linked conditions. Lower compliance, fits advisory/consulting/professional-services, but limited capital-market and exit optionality and no shares/ESOPs — not a universal foreign-entry vehicle.
Branch Office
An extension of the foreign parent (not a separate entity, so the parent stays fully liable) that can earn income from permitted activities — import/export, consultancy, research, technical support — but cannot manufacture (except in an SEZ). Needs RBI approval under FEMA via an AD bank; the parent must usually show a 5-year profit track record and net worth ≥ USD 100,000.
Liaison / Representative Office
A communication bridge only. It cannot earn income or do any commercial activity; all expenses are funded by the parent through inward remittance. RBI approval required. Ideal for exploring the market before committing.
Project Office
A temporary setup to execute a specific contract awarded by an Indian company. It can do commercial activity related to that project (the key difference from a liaison office) and is wound up on completion. Registered with the RBI and RoC.
Employer of Record (EOR)
No entity needed — the EOR is the legal employer while the team reports to you, cutting time-to-team from ~60 days to under 2 weeks. Common as a fast start while a subsidiary is incorporated in parallel. See Patron's EOR India services.
Need Help with India Market Entry & Setup?
Patron Accounting LLP supports foreign companies choosing an India entry route and setting up a subsidiary, branch, liaison/project office or EOR — for Pune, Mumbai, Delhi, Gurugram and pan-India clients.
Whatever route you pick, foreign investment is governed by the FDI policy administered through the MCA for incorporated entities and by the RBI under FEMA for branch, liaison and project offices. Two questions decide a lot: whether your sector allows 100% FDI under the automatic route or needs government approval, and whether you need a separate Indian entity at all.
A subsidiary is formed with the Registrar of Companies and does not need RBI permission to incorporate, though sector caps and the automatic-versus-government route still apply, and post-setup it files FDI reporting, corporate tax with the income-tax department, and annual returns. Branch, liaison and project offices instead go through an RBI approval route via an authorised dealer bank. Eligible startups can also layer on DPIIT recognition and the Startup India benefits, and all entities file under standards issued by the ICAI. Patron handles FDI compliance and FLA returns.
Note: Educational planning aid, not legal/tax/FEMA advice. FDI caps, RBI conditions and the automatic-vs-government route depend on your exact sector and facts and change by notification — confirm the route with a professional before acting.
The EOR Quick-Start (and When to Switch)
When speed matters more than owning an entity on day one, an EOR gets a compliant India team running in under two weeks versus the ~60 days a subsidiary takes to become operational. The EOR is the legal employer; your team works for you day to day. The common pattern: start on EOR, incorporate the subsidiary in parallel, then transfer the team once the entity is live and you want full control, local invoicing and ESOPs.
A foreign company can enter India as an incorporated Indian entity, either a wholly-owned subsidiary or joint venture private limited company or an LLP, or as an unincorporated presence of the foreign parent through a branch office, a liaison or representative office or a project office. A growing alternative for hiring a team quickly without forming an entity is the employer-of-record model. The incorporated routes are set up with the Registrar of Companies, while branch, liaison and project offices are established through an RBI approval route under FEMA.
For most foreign companies that intend to operate, hire and earn revenue in India over the long term, a wholly-owned subsidiary set up as a private limited company is the structure of choice. It is a separate Indian legal entity that can contract, hire, invoice, raise funding and grant ESOPs, it gives the parent full control, it carries the lowest corporate tax rate among revenue-generating entities, and it aligns cleanly with the FDI policy. It is generally cleaner and more credible with banks, customers and employees than a representative office.
A liaison or representative office is only a communication bridge between the foreign parent and Indian stakeholders. It cannot earn income or undertake any commercial activity, and all its expenses must be funded by the parent through inward remittance. A branch office, by contrast, is an extension of the parent that can carry out specified commercial activities and earn income, such as import and export, consultancy, research and technical support, though it cannot manufacture in India except in a Special Economic Zone. Both require RBI approval under FEMA through an authorised dealer bank.
A liaison office suits a foreign company that wants to explore the Indian market, build contacts and understand demand before committing to a full operating presence, and that does not need to earn any income in India yet. Because it cannot trade or invoice and is funded entirely by the parent, it is a low-commitment listening post rather than an operating vehicle. Once the company is ready to actually transact, hire and bill customers, it typically graduates to a subsidiary or a branch office depending on whether it wants a separate Indian entity.
A branch office fits a foreign company that wants to earn income from permitted activities such as import and export, consultancy, research or technical support, but prefers to operate as an extension of the parent rather than form a separate Indian company. The trade-off is that the parent remains fully liable for the branch and the branch cannot manufacture except in a Special Economic Zone. The parent must usually show a profit track record for the preceding five years and a net worth of at least one hundred thousand US dollars, and RBI approval is required.
A project office is a temporary setup that a foreign company establishes to execute a specific contract awarded to it by an Indian company, often in infrastructure or installation. It can carry out commercial activity that relates to that project, which is the key difference from a liaison office, and it is wound up once the project is complete. It is registered with the RBI and the Registrar of Companies. A project office is the natural choice when the foreign company has a single defined Indian contract rather than an open-ended plan to operate in the market.
Yes, but in a limited way. Foreign direct investment into an LLP is allowed under the automatic route only in sectors where 100 percent FDI is permitted and there are no performance-linked conditions. An LLP offers lower compliance than a company and can suit smaller advisory, consulting or professional-services models, but it has limited capital-market and exit optionality and cannot issue shares or ESOPs, so it is not a universal foreign-entry vehicle. Where equity funding, ESOPs or a clean exit might matter, a wholly-owned subsidiary is usually the better choice.
An employer of record lets a foreign company hire and run a team in India without first setting up its own entity, because the EOR is the legal employer on record while the workers report to the foreign company day to day. This cuts time-to-team from around sixty days to under two weeks, which is why many companies start with an EOR while incorporating a subsidiary in parallel, then transition the team across once the entity is live. It is the fastest way to get people on the ground when speed matters more than having an own-entity from day one.
No. A subsidiary is formed by incorporation with the Registrar of Companies and does not need RBI permission to be set up, though it must comply with the Companies Act and with sector-specific foreign investment rules. Whether 100 percent foreign ownership is allowed, and whether the investment follows the automatic route or needs government approval, depends on the sector. Branch, liaison and project offices are different, as they are established through an RBI approval route under FEMA via an authorised dealer bank rather than the company-incorporation route.
Yes, the Patron Accounting Foreign Entry Route Selector is completely free with no signup, and everything runs in your browser with nothing stored on our servers. It weighs your answers on objective, income needs, FDI route, timeline and permanence against the typical strengths of each structure and suggests the route that usually fits best, with reasons and a comparison. It is an educational planning aid, not legal, tax or FEMA advice; FDI rules, sector caps and RBI conditions change and depend on your specifics, so confirm the route with a professional before acting.
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