How to Start a Business in India from the UK

Establishing a company in a different nation may look overwhelming, yet for the United Kingdom’s business people, India is a very good opportunity. The country with the population of more than 1.4 billion people along with the lower operating costs and the support from the government through “Startup India” and “Make in India” programs, has made the UK entrepreneurs more keen to invest in the country. And the best part is? You can set up a company that is 100% compliant with Indian law from wherever you want, without the need to move or get an Indian visa..

Why UK Entrepreneurs Are Turning to India?

India’s low operating expenses are the main reason for the country’s attractiveness. It is much cheaper than the UK for office space, skilled labour, and technology infrastructure. A top office spot in Bangalore or Delhi costs only a small part of a similar one in London. Such savings are especially important to service-based businesses, like software development, digital marketing, or customer support outsourcing, as these cost reductions flow directly to the bottom line.

Step 1: Assess Your Business Sector and FDI Eligibility

India’s Foreign Direct Investment (FDI) policy is complex, and foreign investment is not equally welcomed in all sectors. Before incorporation is executed, it is recommended to check the eligibility of your business sector for foreign investment.

Step 2: Choose Your Business Structure

Entrepreneurs from the UK who are new traders in India have a choice of several legal frameworks, each one offering its own advantages and different standards of compliance.

Private Limited Company (Pvt Ltd)

This option is still the most common one among foreigners and is still the most suitable for numerous business models. 

One-Person Company (OPC)

An OPC is a sole proprietorship company that gives one person the protection of limited liability for his/her personal assets. 

Limited Liability Partnership (LLP)

An LLP is a partnership with limited liability, but it is a flexible structure. Best for: Lawyers, doctors, architects, accountants, and similar professional services.

Branch Office or Liaison Office

In case your parent company in the UK decides to set up a subsidiary in India, you will have the option to either register a branch or a liaison office.

Step 3: Secure Your Essential Pre-Registration Documents

Document Checklist

For you as a Foreign Director:

1. Valid Passport (copy, generally notarized and apostilled)
2. Proof of UK Address (not older than two months)
3. Business Visa (if your visit to India is for business purposes) .
4. Notarized Copies of Documents
5. Apostille Certificate

Step 5: Prepare Your Memorandum of Association (MoA) and Articles of Association (AoA)

These primary documents specify the operation of your company.

Memorandum of Association (MoA)

The MoA specifies as follows:

• Name of the company and address of the registered office
• Objects and purposes of the business
• Members’ liability
• Structure of share capital

Articles of Association (AoA)

The AoA includes:

• conduct board meetings and meetings of shareholders
• Election and dismissal of directors
• Policies on dividends
• Mechanisms for resolving disputes
• Procedures for making decisions

Step 6: Submit Your Incorporation Application (SPICE+ Form)

The SPICE+ form is a consolidated online document that integrates company registration, PAN, TAN, and GST registration into one single application. This unified procedure practically eliminates all the paperwork involved and thus is very beneficial.

Step 7: Obtain Your Certificate of Incorporation

After the Registrar of Companies (RoC) accepts your application, you will get:

• Certificate of Incorporation: This document proves that your business is legally registered in India
• Corporate Identification Number (CIN): A 21-character reference number for your company
• PAN Certificate: For tax filing (generally issued at the same time)

The Certificate of Incorporation is crucial; you will need it for almost every following step: opening a bank account, recruitment, applying for GST registration, etc.

Step 8: Secure Your Registered Office Address

It’s a requirement for every Indian company to have a physical registered office address where official communication is conducted and statutory records are kept.

Address Choices

Physical Office Space:
The rental prices in the prime office locations of Delhi, Mumbai, and Bangalore are much higher compared to other cities, the best cities for foreign entrepreneurs to register a company in India.

Virtual Office Address:
In case you are not going to have a fixed office from the start, several virtual office companies, such as JustStart, provide registered office services at cheaper rates (₹15000–₹30,000 per year)..

Step 9: Register for GST (If Applicable)

The registration for Goods and Services Tax (GST) is obligatory for some enterprises while it is voluntary for others, depending upon their turnover as well as the nature of business. 

GST Mandatory Registration Triggers

• Annual income surpasses ₹40 lakh (or ₹20 lakh for specified states’ service)
• You are a foreign taxable entity (that’s you since you reside in the UK)
• Your operation entails the movement of goods or services between states
• You are engaged in e-commerce or supply chain management

Note: GST compliance is very important. Not complying with the rules may lead to penalties, charging of interest and even criminal prosecution along with the fines.

Step 10: Comply with FDI and Remittance Regulations

You are allowed to invest and profit in India only under the rules of Foreign Exchange Management Act (FEMA) and FDI regulations applicable to foreign investors.

Investment Remittance

If you are funding your Indian company with capital:

• Route funds through Authorized Dealer (AD) banks

1. 1. • Banks like SBI, ICICI, and HDFC have designated AD sections
      • Direct transfers must go through the AD banks and proper documentation must be provided

• File Form 15CA and 15CB (for remittances exceeding ₹5 lakhs)

1. • Form 15CA: Declaration of remittance particulars (provided by you)
   • Form 15CB: Certificate issued by a chartered accountant affirming tax compliance

Step 11: Understand Tax Implications for UK Residents

If you are a UK tax resident with an Indian company, you are liable to the tax obligations of both countries. The UK-India Double Taxation Avoidance Agreement (DTAA) is there to prevent double taxation of the same income.

UK-India DTAA Benefits

The Double Taxation Avoidance Agreement gives relief:

• The maximum tax rate on dividends is 15% (20% withholding in India is reduced to 15% under the treaty)
• The tax on interest income is 10% (reduced from 20% at the base rate)

Let’s say that your Indian company generates ₹100 lakhs (roughly £100,000) annually. You are left with ₹70 lakhs to distribute dividends after paying 30% corporate tax, so these are the tax essentials of foreign companies in India.