Expanding into India offers immense opportunities, but it also comes with a maze of regulatory and compliance requirements. At PAAY & Co LLP, we specialize in helping foreign-owned companies navigate India’s complex statutory framework smoothly and confidently.

Here are the top 5 compliance tips every foreign subsidiary should follow to ensure a smooth India entry and ongoing operations.

1️⃣ Choose the Right Entity Type

Before entering India, it’s critical to choose the right business structure:

• Private Limited Company (most common for foreign subsidiaries)

• Branch Office (regulated under FEMA)

• Liaison Office (no commercial operations allowed)

• LLP (limited scope for foreign investment)

Each structure has its pros, cons, and regulatory requirements under RBI and Companies Act.

📝 Tip: Consult with compliance professionals before finalizing your structure.

2️⃣ Ensure RBI & FEMA Compliance

Foreign investments in India are regulated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA).
You must:

• Report foreign inflow via Form FC-GPR

• Comply with pricing guidelines and sectoral caps

• File periodic returns and maintain documentation

🔍 Non-compliance can result in heavy penalties and reputational risks.

3️⃣ Stay on Top of Statutory Filings

Once operational, your Indian entity must meet various compliance deadlines:

• GST Returns (Monthly/Quarterly)

• TDS Payments & Filings (Form 24Q, 26Q)

• ROC Filings (MGT-7, AOC-4)

• Payroll filings (EPFO, ESIC, PT, Form 16)

• Board meetings, KYC, statutory registers

🕒 Missing deadlines = Penalties, legal notices, or blocked operations.

4️⃣ Comply with Transfer Pricing Rules

If your Indian subsidiary is dealing with the foreign parent or group companies, Transfer Pricing laws apply.
Mandatory actions include:

• Preparing Form 3CEB

• Transfer pricing documentation

• Benchmarking with comparable transactions

💼 A professional audit trail is essential to defend against scrutiny.

5️⃣ Set Up Strong Internal Controls & Reporting

Investors and global headquarters expect accurate, timely, and consolidated reports.
Set up:

• MIS dashboards

• Head-office packs in US GAAP / IFRS

• Budgeting, forecasting, and cash flow reporting

• Monthly close and reconciliations

📊 This not only ensures compliance but also builds investor confidence.

💡 Final Thoughts

India is a land of opportunity—but only for those who get their compliance right. At PAAY & Co LLP, we offer end-to-end compliance services for foreign subsidiaries in India and bookkeeping solutions tailored for global businesses.

Whether you’re a startup or a Fortune 500, our Big 4-trained experts can simplify your India operations — from incorporation to audit and everything in between.

📩 Want Help with India Compliance?

✅ Book a free consultation with our team today.

🔗 Contact Us
📧 office@paay.co.in
📞 +91 95996 41129