Where the money is from matters
Foreign Investment & Ownership in India
In India the investor’s country can matter as much as the sector. One rule catches people completely unprepared.
GCC business setup specialists
The land-border rule is the one that surprises
Most sectors permit full foreign ownership under the automatic route, needing no prior approval. But investment from an entity or beneficial owner situated in a country sharing a land border with India requires prior government approval regardless of sector — and that approval is not quick. Groups with ownership or funding traced to those countries must plan around it rather than discover it at the filing stage.
- Both the sector and the investor’s country checked
- Beneficial ownership traced before you assume the automatic route
- Prohibited and capped sectors identified up front
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Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
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Companies successfully established.
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Two tests, not one
What determines your route
Sector and source country both apply.
| Test | Position |
|---|---|
| Automatic route | Most sectors; no prior approval needed. |
| Government approval route | Specified sectors, and beyond sectoral caps. |
| Land-border country rule | Prior approval required regardless of sector. |
| Beneficial ownership | Traced, not just the immediate investor. |
| Sectoral caps | Apply in several sectors. |
| Prohibited sectors | Closed to foreign investment entirely. |
The foreign investment policy, sectoral caps, the land-border country requirement and prohibited sectors are set by the authorities and change. Yours are checked against the current policy before any filing. Every Indian company must have at least one director resident in India, and foreign share subscription must be reported to the Reserve Bank of India within a short period after allotment. Both are settled before anything else.
How it works
Establishing your route
Trace the ownership before anything else.
01
Trace the investor
Not just the immediate shareholder but the beneficial ownership chain, because the land-border rule looks through.
02
Check the sector
Whether it is on the automatic route, subject to a cap, requires approval, or is closed entirely.
03
Plan the route
The automatic route pursued where available, or a realistic timetable set for government approval where it is required.
- The business sector and activity
- Full ownership chain to beneficial owners
- Country of incorporation of each entity in the chain
- Nationality and residence of beneficial owners
- Whether any owner is in a land-border country
- Where the investment funds will come from
- Proposed shareholding percentage
- Whether existing Indian entities are involved
- Whether the investment is new or a transfer
- Expected investment amount
- Whether downstream investment is planned
- Timeline
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Ownership chain tracing and assessment
- Sector check against caps and prohibitions
- Land-border country rule assessment
- Route determination with a realistic timetable
- Government approval application support where required
- Share subscription and allotment documentation
- Reserve Bank reporting on the investment
- Honest view where approval is unlikely or slow
Not included, quoted separately
- Government fees, paid at cost
- Government approval decisions and timing
- Valuation reports for share pricing
- Legal opinions on policy interpretation
- Tax advice outside India
- Share subscription funds
- Audit and accounts preparation
- Downstream investment structuring, quoted separately
Verify independently
Official Indian authorities
We file directly with these bodies on your behalf.
Ministry of Corporate AffairsRegistrar of CompaniesReserve Bank of IndiaIncome Tax DepartmentGoods and Services Tax authoritiesState labour and municipal authorities
Questions
India foreign investment — FAQs
Can a foreign company own 100% of an Indian company?
In many sectors yes, under the automatic route with no prior approval. Others have caps, require approval, or are closed.
What is the land-border country rule?
Investment from an entity or beneficial owner situated in a country sharing a land border with India requires prior government approval regardless of sector. It looks through to beneficial ownership.
How long does government approval take?
Considerably longer than the automatic route, and it is discretionary. Where it applies, it should drive the whole project timetable.
Which sectors are closed?
Certain activities including some gambling and lottery businesses, and specified real estate and tobacco activities, are closed to foreign investment. We check yours specifically.
Does an intermediate holding company solve the border rule?
No. Beneficial ownership is traced through, so inserting a holding company in a third country does not avoid it.
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