How to Set Up a Foreign Company from India: A Complete Guide for 2025

Indian businesses are going global faster than ever. Whether you’re a startup founder planning to raise global capital, an IT consultancy serving international clients, or a manufacturer seeking proximity to new markets, setting up a foreign entity can be a powerful growth strategy.

But international expansion also brings regulatory responsibilities — especially under India’s FEMA and RBI rules. In this guide, we’ll walk you through how to set up a foreign company from India and manage key compliance requirements.

Step 1: Define Your Business Objective

Before you choose a country or business structure, define why you’re setting up a foreign company.

• Are you expanding into a new customer market?

• Is this an investment holding company?

• Will it be a branch, subsidiary, or a new entity altogether?

The answers will help you decide on the right country and legal structure.

Step 2: Choose the Right Country and Entity Type

Here are some popular destinations Indian businesses prefer:

Singapore – Trusted ecosystem, global investor access, tax-efficient
UAE (Dubai, Sharjah, Ajman) – Zero tax, proximity to India, fast setup
USA (Delaware) – Ideal for startups raising funding or SaaS companies
UK – For mature markets, regulated financial services, and simple structure
Mauritius – Offshore holding structure with treaty benefits

Each country has its pros and cons based on your industry, investment plans, and market entry goals.

Step 3: Understand FEMA and RBI Compliance

If you are an Indian resident or company investing abroad, you must follow FEMA and RBI’s Overseas Direct Investment (ODI) or Liberalised Remittance Scheme (LRS) rules.

For Individuals (Resident Indians)

• You can invest up to USD 250,000 per financial year under LRS

• Purpose can include buying shares in a foreign company or starting a business

• The remittance must go through authorized banks with proper documentation

For Indian Companies

• Companies can invest in foreign JVs or wholly owned subsidiaries (WOS)

• Must comply with RBI’s ODI guidelines

• Requires board resolution, valuation reports (in some cases), and RBI reporting via AD banks

Step 4: Prepare and Submit RBI Compliance Forms

Here’s a snapshot of what Indian founders must file:

Note: Non-compliance can attract penalties under FEMA regulations.

Step 5: Set Up the Foreign Entity

Once Indian approvals are done, proceed with registering the foreign company.

• Select a business name

• Prepare constitutional documents (MOA/AOA or equivalent)

• Submit KYC of shareholders and directors

• Choose office setup: virtual, flexi, or physical

• Open a foreign bank account

• Get tax ID or business license as per local rules

ScaleX works with trusted local agents and authorities in Singapore, UAE, US, UK, and Mauritius to get your company registered quickly and correctly.

Step 6: Maintain Ongoing Compliances

After registration, ensure continuous compliance both in India and abroad.

In India:

• File Annual Performance Report (APR) with RBI

• Include foreign assets in personal or corporate tax returns

• Keep records of shareholding and remittances

In Host Country:

• File local tax and corporate returns

• Renew business licenses

• Maintain a registered office and local agent (if required)

• Appoint local directors (for certain jurisdictions like Singapore)

How ScaleX Helps Indian Founders Go Global

We make global expansion simple and compliant for Indian entrepreneurs, consultants, and businesses. Here’s how:

• Jurisdiction and structure advisory

• Company incorporation in Singapore, UAE, US, UK, and more

• RBI/ODI/LRS compliance filing through AD banks

• Coordination with local agents and embassies

• Foreign bank account opening support

• End-to-end documentation and annual compliance services

Setting up a foreign company from India is no longer complex—but it must be done right. From FEMA and RBI regulations to international tax and governance, every step must be aligned to avoid delays or penalties.

At ScaleX, we handle everything for you—so you can focus on launching and growing your business internationally.