A Complete Guide to Setting Up a Company in India: Procedures, Costs, and Timeline

The Full Picture of Setting Up a Company in India: From Choosing an Entity Type to Completing Registration

For Japanese companies considering entry into India, setting up a local company is one of the most important decisions to make. Many steps must be carried out accurately, from choosing a legal entity type and preparing the necessary documents to completing various registration procedures and handling post-incorporation compliance.

Based on the latest legal and practical information as of 2025-2026, this article thoroughly explains the procedures, costs, and timeline for setting up a company in India. It also covers pitfalls commonly encountered in practice and how to handle common problems.

Business entity types in India: four options and their characteristics

1. Local company (Private Limited Company)

The most common entity type for Japanese companies entering India is the Private Limited Company. It has legal personality under the Companies Act, 2013, and can operate as a legal entity independent of its parent company.

100% foreign ownership (WOS: Wholly Owned Subsidiary) is also permitted in many sectors, and most Japanese companies choose this entity type. The requirements are a minimum of two directors (one of whom must be an Indian resident) and a minimum of two shareholders (source: JETRO).

2. Branch office

Commercial activity within India is limited, but it can serve as an extension of the head office for dispatching staff and carrying out projects. Approval from the RBI (Reserve Bank of India) is required, and setup takes about 3 to 6 months.

3. Liaison office

This is a base limited to market research and communication with the head office. Commercial or revenue-generating activities are not permitted. It suits the phase of preliminary research into the Indian market. RBI approval is required.

4. LLP (Limited Liability Partnership)

A Limited Liability Partnership (LLP) is a business entity with a flexible operating structure. It suits consulting and service businesses, but because certain FDI (foreign direct investment) regulations apply, advance confirmation is needed.

The procedural flow for setting up a local company (Private Limited Company)

Step 1: Advance preparation (1-2 weeks)

Deciding on the company name: The company name is reserved through the RUN (Reserve Unique Name) service on the MCA (Ministry of Corporate Affairs) portal. Approval takes about 2 to 3 business days. Check in advance that the name does not overlap with similar existing names.

Selecting directors:最低2名の取締役が必要で、うち1名は当該事業年度に通算182日以上インドに滞在した居住者でなければなりません。日本から派遣する非居住取締役については、DIN（Director Identification Number）の取得にパスポートのアポスティーユ認証が必要で、1-2週間の追加日数を見込む必要があります（出典：Startup Solicitors).

Step 2: Obtaining a DSC and DIN (3-4 business days)

DSC (Digital Signature Certificate): Obtain a digital signature certificate for every director. These are issued by an Indian-certified certifying authority.

DIN (Director Identification Number): This is an identification number for each director. Submission of KYC documents (proof of identity and address) is required.

Step 3: Filing for incorporation via the SPICe+ form (6-7 business days)

Since 2020, the MCA's SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form has allowed the following procedures to be processed together in a single application.

- Company incorporation registration (issuance of the Certificate of Incorporation, COI)

- Obtaining a PAN (taxpayer number)

- Obtaining a TAN (tax deduction account number)

- Registration with the EPFO (Employees' Provident Fund Organisation)

- Registration with the ESIC (Employees' State Insurance Corporation)

- Reserving a bank account opening

The incorporation application must be filed together with the Memorandum of Association (MOA) and Articles of Association (AOA).

Step 4: Mandatory procedures after obtaining the COI (30-180 days after incorporation)

First board meeting: Must be held within 30 days of obtaining the COI.

Commencement of business declaration (INC-20A): The declaration of commencement of business must be filed with the MCA within 180 days of obtaining the COI. Failing to do so risks having the company treated as a dormant company.

Payment of capital: Complete the subscription payment against the authorized capital and deposit it into the bank account.

GST registration: Register for Goods and Services Tax. Depending on the nature of the business, registration in each relevant state may be required.

A benchmark for incorporation costs

The cost of setting up a local company in India varies depending on the amount of authorized capital and the state, but general benchmarks are as follows.

Government fees (MCA registration fee, stamp duty): For authorized capital of 10 lakh rupees (about 1.8 million yen), approximately 4,000 to 8,000 rupees (about 7,000 to 14,000 yen). Stamp duty varies by state; in Delhi it is 200 rupees for the MOA and 300 rupees for the AOA, but it is higher in Maharashtra and Karnataka (source: RegisterKaro).

Professional fees (lawyer, CS, and CA costs): Typically 40,000 to 80,000 rupees (about 70,000 to 140,000 yen). Fees can run higher for Japanese-speaking consultants serving Japanese companies.

DSC and DIN acquisition costs: About 1,500 to 3,000 rupees (about 2,700 to 5,400 yen) per director.

Rough total:上記の内訳を積み上げると、設立登記だけで約8-17万円程度。ただし、事業ライセンス取得、オフィス契約、従業員採用などを含めた総合的な進出コストは、別途数百万円規模となることが一般的です。

A realistic timeline for incorporation

The fastest possible schedule, assuming all documents are in order, is as follows.

Name reservation: 2-3 business days

Obtaining a DSC and DIN: 3-4 business days

SPICe+ filing and obtaining the COI: 5-7 business days

Total (fastest): About 2-3 weeks

However, this is an ideal-case scenario. In practice, factors such as obtaining apostille certification for non-resident directors (an additional 1-2 weeks), technical issues with the MCA portal, RBI reporting procedures, and opening a bank account (2-4 weeks) mean that the entire process typically takes about 4 to 6 months, which is the realistic schedule (source: Ahlawat Associates).

Post-incorporation compliance: obligations that are risky not to know about

Annual compliance

Annual General Meeting (AGM): Held within 6 months of the end of each fiscal year

Board meetings: Held at least 4 times a year, at least once per quarter

Preparing and auditing financial statements: Audited financial statements from a statutory auditor must be filed with the MCA

Annual returns (AOC-4, MGT-7): Filing of annual reports with the MCA

Tax audit report (Form 3CA/3CB-3CD): Due every year on September 30

Income tax return (ITR): Due every year on October 31 for companies subject to statutory audit (November 30 for companies subject to transfer pricing regulations)

GST filing: Monthly or quarterly filing is required

株式の電子化（Demat化）

Under an amendment to the Companies Act in October 2023, all private companies except small companies are required to dematerialize their shares by June 30, 2025が義務付けられました。期限はすでに到来しているため、未対応の法人は遅延対応とペナルティの有無を確認してください。

Common pitfalls for Japanese companies, and how to address them

1. Securing an India-resident director: At least one India-resident director is required, but many companies struggle to find someone trustworthy for the role. Local partners We recommend consulting a market-entry support consultant or similar local expert.

2. Addressing transfer pricing rules: Transactions with the Japanese parent company are subject to transfer pricing rules. An appropriate transfer pricing policy must be established and documented in advance.

3. The cost of exiting: C-PACEの導入で手続きは改善しており、書類が整えばストライクオフは60〜110日、任意清算でも12〜24ヶ月が目安です。それでも設立より手間と費用がかかります。進出前から出口戦略を想定しておくべきです。Causes of failure It's important to understand these in advance.

4. Delays in opening a bank account: Due to stricter KYC requirements, opening a corporate account can take 2 to 4 weeks. Build slack into your incorporation schedule.

Frequently asked questions

What business entity type is common for Japanese companies entering India?

The most common is the Private Limited Company. It has legal personality under the Companies Act, and 100% foreign ownership is permitted in many sectors. The requirements are at least two directors (one of whom must be an India resident) and at least two shareholders.

What is the main procedural flow for setting up a local company?

The process proceeds through name reservation, obtaining a DSC and DIN, filing for incorporation via the SPICe+ form, and post-COI procedures. SPICe+ processes company registration together with obtaining a PAN and TAN, various registrations, and reserving a bank account opening, all in one go.

How much does it cost to set up a company in India?

Combining government fees and professional fees, incorporation registration costs run to a benchmark of a few hundred thousand yen. However, the overall cost of market entry, including business licenses, office leases, and hiring, typically runs into the millions of yen.

How long should companies expect the incorporation process to take?

If all documents are in order, it can take as little as a few weeks, but that is an ideal-case scenario. Including things like document certification for non-resident directors and opening a bank account, a realistic schedule for the entire process is a few months.

What pitfalls do Japanese companies commonly fall into?

These include securing an India-resident director, addressing transfer pricing rules, the cost of exiting, and delays in opening a bank account. Exiting, in particular, is far more difficult than setting up and takes considerable time and money, so companies should plan an exit strategy before entering the market.

What compliance obligations exist after incorporation?

Companies are required to hold an annual general meeting and board meetings, file audited financial statements, submit annual returns, and file income tax and GST returns. We recommend securing a trustworthy local lawyer, accountant, and company secretary early on and receiving ongoing advice from them.

Summary: Careful planning is the key to successfully setting up a company in India

Setting up a company in India can be completed in 2 to 3 weeks for the procedures themselves, but a realistic estimate for the total time from advance preparation to the start of business is 4 to 6 months. In terms of cost, incorporation registration alone runs to about 150,000 to 300,000 yen, but the overall cost of market entry ranges from a few million to tens of millions of yen depending on the scale of the business.

The most important thing is to secure trustworthy local experts (lawyers, accountants, company secretaries) early and to receive ongoing advice from them even before incorporation. Overview of the Indian Market With a clear understanding of the risks involved, talent recruitment advancing your business plan and localization tax strategy in parallel will enable a smooth start to operations after incorporation.