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Basics of incorporation in India — from corporate form to registration process, GST registration and office requirements.

By ARAZIA India Desk10 min read

Establishment of a corporation in India — Panoramic view of Gurgaon office building — Aleksandr Zykov from Russia (CC BY-SA 2.0, Wikimedia Commons)

When meeting Korean business executives who want to set up a corporation in India, the first question that comes up is always similar. “Should I lightly open a branch office or set up a subsidiary?” This single choice will completely change your subsequent tax reporting method, scope of business activities, and personnel recruitment process, so you need to make a careful decision from the beginning. If you actually watch the process of establishing an Indian corporation from the side, you will see that it is more important than the documents themselves.Time to go back without knowing the order of the procedureI realize that this is the most wasteful thing.

This article is for Korean companies preparing to enter India.Select legal entity form → MCA (Ministry of Corporate Affairs) registration process → GST registration → Registered office requirementsWe have organized the practical flow in order. However, as regulations related to corporate law and tax law in India are frequently revised and detailed requirements vary by state, please refer to this article for the purpose of understanding the overall picture, and be sure to check the latest official standards with a local CA (Certified Public Accountant) or CS (Corporate Legal Counsel) before actually applying.

In particular, the NCR region, where Korean companies are concentrated, such as Gurgaon and Noida, has an abundant supply of offices and a well-equipped accounting and legal service infrastructure, making it a relatively accessible environment for those setting up their first Indian corporation.

01Understanding Indian Corporation Forms — WOS, JV, Branch, Liaison Office

The main ways to enter India areEstablishment of a corporation (Company)classOffice openedIt is divided into two branches. The corporation has a separate legal personality under the Indian Companies Act, and the office is operated as an extension of the Korean headquarters. Depending on which type you choose, the taxation method, scope of business activities, and fund remittance procedures vary greatly, so clarifying your business purpose is the first step.

form	personality	Key Features
WOS (Subsidiary, Private Limited Company)	independent corporation	The Korean headquarters can own 100% of the shares (FDI limits for each industry must be checked). Free sales and sales activities, most commonly chosen by Korean companies
JV (joint venture)	independent corporation	Established by dividing shares with an Indian partner. It is advantageous in responding to local networks and licensing, but agreement on shareholding structure and management rights is important.
Branch Office	extension of headquarters	RBI approval required. Only activities directly related to headquarters work are permitted, and independent manufacturing and retail sales are limited.
Liaison Office	extension of headquarters	Only non-profit contact work is possible, such as market research, information collection, and connecting headquarters and Indian business partners; direct sales cannot be generated.
Project Office	extension of headquarters	Temporary office for carrying out specific projects (construction, plant, etc.), liquidated after project completion

Most Korean companies generate direct sales in India and plan to expand their business in the long term.Private Limited Company in WOS formSelect . For simple market research or purchasing agency purposes, it is often used in practice to start lightly as a liaison office and then convert to a corporation once the business is on track. However, the automatic approval limit for foreign direct investment (FDI) varies depending on the industry, and some industries require government approval, so confirmation is necessary from the business planning stage.

02Corporation establishment process — from DSC·DIN to SPICe+ integrated application

Establishment of a private limited company is carried out through the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA) in India, and currently most of the procedures are completed.SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus)It is processed all at once with an integrated online form called.

Establishment procedure flow

Issuance of DSC (digital signature certificate)— All persons to be registered as directors must obtain the certificate through an Indian certification body. Directors in Korea often submit documents such as passports notarized and apostilled.
Apply for DIN (Director Identification Number)— Processed together within the SPICe+ application.
Company name reservation— Apply for your desired name in SPICe+ Part A and receive ROC approval.
Drafting Articles of Incorporation— Prepare MOA (Memorandum of Association) and AOA (Articles of Association).
Submit SPICe+ Part B— Along with corporate registration, you can apply for PAN (business identification number), TAN (withholding tax number), GST if necessary, EPFO·ESIC (social insurance) registration, and application for bank account opening (AGILE-PRO-S) all at once.
Issuance of COI (Certificate of Incorporation)— After the ROC review, a Certificate of Incorporation (COI) with a Corporation Registration Number (CIN) is issued, and from this point on, corporate personality is recognized.

Documents to prepare (based on moving to Korea)

Copy of passport (notarized/apostille)
Proof of overseas residence address (utility bill, etc., notarized)
passport photo
Korean head office’s board of directors’ resolution (approval of establishment of a subsidiary) — when participating as a corporate shareholder
Proof of registered office address (lease agreement, owner agreement (NOC), recent utility bill)

The time required for establishment depends on document completion and company name approval procedures.Fluctuations: roughly a few weeksTherefore, it is safe to check the exact processing period through the MCA official site or the CA/CS in charge.

Indian corporation establishment process - Articles of incorporation and contract signing scene — Before applying for SPICe+ integration, key articles of incorporation such as MOA and AOA must be prepared in advance. · Scanning Dmitry Makeev, scan date - 2020 year. (Public domain, Wikimedia Commons)

03GST Registration — When and How to Get It

GST (Goods and Services Tax, integrated indirect tax) is a value-added tax that applies throughout India.GSTIN (15-digit GST registration number)You must obtain a tax invoice and have the input tax deducted.

GST When registration is required

Annual sales are determined by state and industry.Exceeding the registration threshold amount(Standards vary depending on goods/services and state, so check the latest standards)
Supplying goods and services to other statesInter-state SupplyWhen this occurs:
When selling through an e-commerce platform
In case of specific industries such as import and export

From the beginning of establishment, most Korean subsidiaries have reasons such as issuance of tax invoices, input tax deductions, and customer requests.Register GST at the same time as establishing the corporation.It often happens. You can apply for corporate registration and GST registration together by using the AGILE-PRO-S form of the SPICe+ integrated application.

GST Documents required for registration

division	document
proof of incorporation	PAN Card, COI (Certificate of Incorporation), MOA·AOA
Proof of business	Registered office lease or proof of ownership, recent utility bill
Proof of representative/director	Photo, proof of address, PAN
financial information	Corporate bank account information (copy of canceled check or bankbook)
electronic signature	DSC of representative signatory

Once the GST Registration Certificate is issued, monthly or quarterlySales/Purchase Report (GSTR)must be submitted. Since the reporting cycle and tax rate range vary depending on the business size and industry, we recommend that you manage the reporting schedule after registration in a calendar with your accountant.

04Office Requirements and Registered Office – Proof of Address is Key

When applying for establishment, an Indian corporation mustRegistered Office Addressmust be reported. This is the official address to which government notices and legal documents are served and is also required to be posted on the Company Name Board. If you first reported the temporary address before starting your business, you must report the change to the actual business address within the specified deadline (usually 30 days) after establishment.

Proof of registered office address

Lease/Rent Agreement or proof of ownership
Building owner’s consent (NOC: No Objection Certificate)
Recently issued utility bill (electricity, gas, etc., usually within 2 months)

Comparison by office type

form	characteristic	suitable case
self rented office	Securing independent space, easy to secure lease agreement	If you have a plan to recruit human resources and need a stable workplace
coworking space	Large operators such as WeWork, Awfis, and Smartworks operate multiple branches in Gurgaon and Noida. Low initial cost burden	If you want to get started quickly with a small group of people
virtual office	Register only address without physical presence. Only some operators provide documents for registration as a corporation/GST	In cases where there are few permanent personnel, such as at a liaison office, it is necessary to check whether GST registration is possible in advance.

If you use a coworking space as a registered office, you must obtain permission from the operator.Can I obtain a formal lease agreement (or use agreement) and NOC?You must check in advance. Some low-cost shared offices do not have the required document format for corporate/GST registration, so cases of late registration being rejected often occur in practice. Things to keep in mind about the deposit and contract provisions when signing an office lease contract:A practical guide to real estate in IndiaIt is covered in more detail, so please refer to it as well.

Office Requirements in India — A Look Inside a Coworking Space — When using a coworking space with a registered office address, you must check the operator's official rental documents and NOC. · Adited Marketing Communications LLP (CC BY-SA 4.0, Wikimedia Commons)

05Board composition and capital remittance — check Indian director requirements

Private Limited CompanyAt least two directors and two shareholders(Shareholders can be from 2 to 200 (separately for OPC, which is a one-person company)). Directors and shareholders may be the same person, and it is common for executives and employees of the Korean headquarters to concurrently serve as directors.

The most missed part in practice isAt least one of the directors must have resided in India for a certain period of time as of the previous fiscal year.is a requirement. Relevant detailed standards may be adjusted according to amendments to the Indian Companies Act, so you must check the latest requirements before incorporation. Recruiting Indian director candidates (local partners, prospective hires, or professional nominee moving services) early on will make your incorporation schedule run much more smoothly.

Capital remittance and FDI reporting

After the amendment to the Indian Companies Act in 2015, Private Limited CompanyThe statutory minimum paid-up capital requirement is abolished.However, considering actual business operations and bank account opening screening, it is common to prepare capital equal to the initial operating capital. When the Korean headquarters remits investment funds to an Indian corporation, it must be done through an official banking channel, and after the remittance, the bank issuesFIRC (Foreign Remittance Confirmation)must be kept.

Afterwards, the companyFC-GPR (Foreign Equity Issuance Report)must be reported within the stipulated deadline through the Reserve Bank of India (RBI) FIRMS portal. Most industries allow investment without separate government approval through the automatic route, but some industries require government approval, so please check the latest FDI policy before investing. Meanwhile, the income tax reporting obligation of individual Korean directors and expatriates dispatched to India is separate from corporate tax, and the standards and tax rates for determining residency are as follows:India expatriate income tax basicsYou can check it in the article.

India Business Meeting - Board of Directors composition and investment discussions — Since at least one director of an Indian corporation must meet Indian residency requirements, it is advisable to consider local director candidates from the beginning. · Richter Frank-Jurgen (CC BY-SA 2.0, Wikimedia Commons)

06Compliance that is easy to miss after establishment — from PAN·TAN to annual reporting

The incorporation process does not end with the issuance of COI. Rather, managing the compliance schedule, which is repeated every year thereafter, is the key to operating an Indian corporation.

Items to be dealt with immediately after establishment

Open a corporate bank account— You can apply at the same time as applying for SPICe+, but the bank's own KYC procedures are additionally required before actual account activation.
PAN·TAN utilization registration— Used for issuing tax invoices and reporting tax withholding (TDS).
Shops and Establishment Registration by State— Basic labor-related registration in the state where the business is located.
Professional Tax Registration— This is an occupational tax required by some states, and eligibility varies depending on the location of the business.
If you plan to export or import, apply for an IEC (Import/Import Identification Number)

Reporting schedule repeated every year

item	detail
Appointment of a statutory auditor	After establishment, the first auditor (statutory auditor) must be appointed within a set deadline.
Financial Statement Reporting (AOC-4)	Submit financial statements to ROC at the end of each fiscal year
Annual Report (MGT-7)	An annual report containing the status of shareholders and directors is submitted to the ROC.
corporate tax return	Report corporate tax to the Income Tax Department of India every fiscal year.
GST Report	Report sales and purchase details on a monthly or quarterly basis depending on the registration type.

If you miss any of these schedules, you may be subject to fines or additional taxes, so most Korean companies sign annual contracts with local CA (Certified Public Accountants) and CS (Corporate Legal Counsel) offices from the beginning of their establishment and outsource compliance management. If you plan to hire employees in earnest after the establishment of a corporation,Indian Staffing and Labor BasicsPlease review the basic concepts of recruitment channels and salary structure (CTC) in the article.

Useful tips

Process at once with SPICe+ integrated application

Using the MCA (Ministry of Corporate Affairs) SPICe+ integrated form, you can complete corporate registration, issuance of PAN·TAN, registration of GST·EPFO·ESIC if necessary, and application for bank account opening (AGILE-PRO-S) all in one application. If you divide and submit documents multiple times, it is easy to repeat rejections and resubmissions, so preparing a consolidated application from the beginning is a way to save time.

Indian director candidates are recruited in advance before establishment.

At least one of the directors must have resided in India for a certain period of time as of the previous fiscal year. You should decide in advance whether you will hire a local partner, a representative to be hired, or a professional nominee moving service at the stage before applying for establishment, so that document preparation and schedule are not disrupted.

Prepare registration office documents with ample time

Proof of registered office address, such as a lease agreement, building owner's consent (NOC), and recent utility bill, is required repeatedly in various procedures (corporation registration, GST registration, bank account opening). If you organize scanned copies in advance, you can save yourself the trouble of re-issuing them for each procedure.

Be sure to keep your FIRC and check FC-GPR reporting deadlines

When the Korean headquarters remits investment funds to an Indian corporation, a FIRC (Foreign Remittance Confirmation) is issued by the bank. Since FC-GPR must be reported to the RBI FIRMS portal based on this document within the specified deadline, it is safe to separately manage the reporting schedule from the time of remittance.

Local CA·CS partners move together even before establishment

India's corporate law and tax law regulations are frequently revised and detailed requirements vary by state, so it is risky to proceed alone by only looking at the official website. If you work with a local Certified Public Accountant (CA) or Corporate Counsel (CS) office before applying for establishment, delays due to document rejection can be greatly reduced.

Common pitfalls and how to solve them

People only know that the statutory minimum paid-up capital requirement has been abolished, and they misunderstand that opening an account will be easy.

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Although the minimum capital requirement under the Company Act has been eliminated, the actual bank's corporate account opening screening (KYC) and the need for initial operating funds are separate. Before establishment, decide in advance how much initial capital you will remit along with your business plan.

The board of directors is comprised entirely of Korean residents without checking the director residency requirement (requirement for number of days of residence in India in the previous fiscal year).

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Under Indian company law, at least one director must meet prescribed Indian residency requirements. Decide from the beginning whether to use a local partner or Nomini moving service, and reconfirm the latest requirements with CA·CS before establishment.

I applied for an inexpensive co-working space to the registration office, but my registration was rejected GST due to lack of formal rental documents.

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If you want to use a coworking space as a registered office, you must check before signing the contract whether the operator issues a formal lease agreement and NOC required for registration as a corporation·GST. It is safe to focus on reviewing large operators.

After reporting the registered office as a temporary address, you do not report the change to the actual business address within the specified deadline.

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After registering a temporary address, you must report the change to your actual business address within a set deadline, usually 30 days. Mark this deadline separately on your checklist immediately after incorporation.

If you miss the FC-GPR filing deadline, you will be assessed a delay penalty by RBI.

→

After remitting overseas investment funds, start preparing FC-GPR reporting as soon as you receive the FIRC, and share the reporting deadline with CA·CS so as not to miss it.

Latest updates

With the SPICe+ integrated application, the corporate·PAN·TAN·GST registration procedures are being organized into one window.Applications for corporate registration, PAN·TAN issuance, GST·social insurance registration, and bank account opening, which in the past had to be applied separately to various organizations, are gradually being unified through MCA's SPICe+ integrated form.
GST The trend of gradually expanding the scope of electronic invoicing (e-Invoicing)As the electronic tax invoice (e-Invoicing) system, which has been gradually expanding its scope based on sales volume, is being applied to more and more businesses, new corporations need to check the latest standards to see if they are eligible.

FAQ

How much minimum capital is required to set up a corporation in India?

Following the amendment to the Companies Act in 2015, the statutory minimum paid-up capital requirement for Private Limited Companies was abolished. However, considering actual business operations and bank account opening screening, it is generally recommended to prepare capital equal to the initial operating capital, and it is recommended to consult with CA for the specific size in accordance with the business plan.

Is it mandatory to have an Indian director?

yes. Under the Indian Companies Act, at least one director must have resided in India for a certain period of time as of the previous fiscal year. You can utilize local partners, prospective hiring representatives, and professional nomini moving services. Detailed requirements may be revised, so you should check the latest standards before establishment.

GST Is registration possible at the same time as establishment of a corporation?

it's possible. You can apply for corporate registration and GST registration together by using the AGILE-PRO-S form of the SPICe+ integrated application. However, GST registration requirements (based on sales, weekly trading, etc.) vary depending on the industry and state, so you need to check in advance.

Can I register my office as a coworking space?

It is possible, but before signing the contract, you must check whether the operator issues a formal lease agreement and an owner's consent (NOC) required for registration as a corporation·GST. There are cases where registration of some low-cost shared offices is rejected due to lack of documentation format.

How long does it take to establish a corporation?

The time required varies greatly depending on whether the documents are complete and the company name approval process. It is safe to check the exact processing period based on the latest standards through the MCA official site or the responsible CA/CS office.

References & links

MCA — Ministry of Corporate Affairs, India GST Portal — India Integrated Indirect Tax Official Site RBI — Reserve Bank of India Invest India — India's official agency for investment promotion KOTRA Korea Trade-Investment Promotion Agency