Author: shubham Agarwal

How to Set Up an Indian Subsidiary has become a key consideration for global investors and companies as India emerges as a preferred destination for establishing a long-term presence in Asia. With its steadily growing economy, business-friendly reforms, expanding consumer base, and a highly skilled workforce, India presents a unique mix of opportunity and stability. For many foreign businesses, setting up a fully functional subsidiary offers greater strategic control, operational autonomy, and legal advantages compared to distributorships, franchises, or liaison offices. A subsidiary in India refers to a company incorporated under the Companies Act, 2013, with foreign ownership—either as a Wholly Owned Subsidiary (WOS), where 100% shares are held by the foreign parent company, or a Joint Venture (JV), where ownership is shared with Indian individuals or entities. Regardless of shareholding pattern, once incorporated, the subsidiary is treated as an Indian company. It acquires an independent legal identity, pays taxes as a resident Indian entity, can hold assets, enter into contracts, hire employees, sue or be sued in its own name. Understanding India’s FDI Framework Foreign investment into India is primarily governed by the Foreign Exchange Management Act, 1999 (FEMA) and the Consolidated FDI Policy released by the Department for Promotion of Industry and Internal Trade (DPIIT). Investment entry routes are broadly categorized into two: Many sectors—like IT services, software development, consulting, manufacturing, and single-brand retail (subject to conditions)—allow 100% FDI under the automatic route. However, critical and regulated sectors like defence, print media, telecom, and multi-brand retail require government approval or have sectoral caps. It’s important to identify which route applies to your business before moving ahead. Every FDI inflow must comply with valuation norms, FEMA pricing guidelines, and must be reported to the Reserve Bank of India (RBI) via its FIRMS portal within the prescribed timelines. Delayed or inaccurate filings may lead to penalties or regulatory scrutiny. Legal and Structural Prerequisites for Incorporation The most commonly preferred structure for foreign subsidiaries is the Private Limited Company, offering limited liability protection, strong credibility with stakeholders, and flexibility in management. The incorporation process is entirely digital, managed by the Ministry of Corporate Affairs (MCA) through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) system. Key incorporation requirements include: The name of the proposed company must follow the naming guidelines and should not resemble existing company names or trademarks. The name is first reserved through Part A of the SPICe+ form. Upon name approval, Part B of the SPICe+ form is used to upload the following key documents: Post verification, the MCA issues the Certificate of Incorporation along with a Corporate Identification Number (CIN). Simultaneously, the entity is allotted a PAN, TAN, and can optionally register for GST, ESIC, and EPFO. Capital Infusion and RBI Compliances There is no minimum capital requirement for private limited companies in India. However, once the bank account is set up, the foreign investor must remit the share capital via a recognised banking channel. Upon receiving the funds, the company must issue share certificates to the shareholders and file Form FC-GPR within 30 days of share allotment through the RBI FIRMS portal. Compliance with FEMA’s pricing guidelines is crucial. Share valuation must be based on internationally accepted pricing methodologies (typically DCF or NAV-based methods), and documentation must be accurate and timely. Errors, omissions, or delays can result in penalties and affect future remittances or repatriations. Post-Incorporation Legal Obligations Setting up the company is just the first step. Maintaining compliance is an ongoing responsibility. Immediately after incorporation and capital infusion, the company must: Neglecting post-incorporation compliance can lead to heavy penalties, disqualification of directors, and loss of credibility. Taxation and Transfer Pricing Guidelines An Indian subsidiary is taxed as a domestic entity. The base corporate tax rate is 22%, subject to applicable surcharge and cess, provided no special deductions or incentives are claimed. New manufacturing companies or startups registered under government schemes may be eligible for lower tax rates, sometimes as low as 15%. All transactions between the Indian subsidiary and its foreign parent or group entities fall under transfer pricing regulations. These must be conducted at arm’s length pricing and backed by detailed documentation. Tax authorities in India are especially vigilant about pricing of inter-company services, royalties, and intra-group transactions. Dividends declared by the subsidiary are taxed in the hands of the foreign shareholder, and withholding tax applies depending on the nature of payment and the Double Taxation Avoidance Agreement (DTAA) between India and the foreign country. Repatriation of Funds and Exit Strategies Profits, dividends, royalties, and other legitimate payments can be freely repatriated, subject to compliance with FEMA and applicable taxation. Dividend payouts must be after the deduction of applicable withholding taxes and must follow RBI’s guidelines. When it comes to exiting the investment, foreign shareholders may: In each of these options, fair valuation, tax implications, regulatory approvals, and timelines must be closely examined. Key Mistakes to Avoid Setting up a subsidiary involves navigating multiple layers of regulation. Common pitfalls include: These mistakes can cause significant delays, invite scrutiny, or even result in penalties. Partnering with seasoned legal, tax, and compliance professionals from the beginning helps avoid costly errors. Conclusion Setting up a subsidiary in India is a rewarding long-term strategy for foreign companies aiming to participate meaningfully in one of the world’s fastest-growing economies. While the process involves multiple legal steps and regulatory filings, the country’s digital governance reforms have made it far more transparent and streamlined than before. With careful planning, sectoral due diligence, and expert guidance, a foreign company can not only enter the Indian market smoothly but also build a scalable, compliant, and profitable business that taps into India’s vast economic potential. A properly structured Indian subsidiary is more than just a local branch—it’s a gateway to sustained growth, innovation, and impact in the Indian business landscape. juris consultants shubham Agarwalwww.jurisconsultants.in

India FDI limits have become a focal point for global investors as the country emerges as a compelling destination for foreign investments. Owing to its rich cultural diversity and flourishing industries, India’s swiftly growing economy and varied cultural landscape offer numerous opportunities for investors eager to explore new markets. As India progresses in liberalizing its economy and opening various sectors to international participants, grasping the limits of Foreign Direct Investment (FDI) becomes essential for anyone considering investment in this region. This article aims to provide comprehensive insights into FDI in India—from entry pathways and sector-specific limits to compliance obligations and potential advantages. Whether you are an entrepreneur or an investor examining India’s dynamic market environment, this guide will assist you in navigating your investment journey with assurance. What is FDI? Foreign Direct Investment (FDI) refers to the investment made by an individual, company, or entity based in one country into the business or capital of another country — typically by acquiring ownership, control, or a lasting interest in a local enterprise. This type of investment usually involves acquiring significant stakes, establishing subsidiaries, or forming joint ventures in the host country. As per Foreign Exchange Management Act, 1999 (FEMA), FDI means investment through capital instruments (such as equity shares, convertible debentures, preference shares, etc.) by a person resident outside India in an unlisted Indian company or in 10% or more of the post-issue paid-up equity capital of a listed Indian company. Note:- In case an existing investment by a person resident outside India in capital instruments of a listed Indian company falls to a level below ten percent, of the post issue paid-up equity capital on a fully diluted basis, the investment shall continue to be treated as FDI. Explanation: – Fully diluted basis means the total number of shares that would be outstanding if all possible sources of conversion are exercised. FDI Entry Routes FDI in India is allowed through two routes: FDI Limits across Key Sectors (2025) India reviews its FDI policy regularly to keep pace with global trends and domestic priorities. Here is a snapshot of the latest sectoral limits and routes for FDI in 2025: SECTOR FDI LIMIT ROUTE Agriculture (specified activities like horticulture, animal husbandry, plantations) 100% Automatic Airport (Greenfield and brownfield) 100% Automatic Manufacturing 100% Automatic Insurance 100% Automatic Defence 100% Automatic (up to 74%), Government approval + security checks (above 74%) Telecom 100% Automatic (up to 49%), Government approval (above 49%) Pharmaceuticals (Greenfield) 100% Automatic Pharmaceuticals (Brownfield) 100% Automatic (up to 74%), Govt. (above 74%) E-Commerce 100% Automatic Single Brand Retail Trading 100% Automatic (up to 49%), Govt. (above 49%) Multi-Brand Retail Trading 51% Government Approval Private Sector Banking 74% Automatic (up to 49%), Govt. (above 49%) Public Sector Banking 20% Government Approval Civil Aviation 100% Automatic Railways (in select activities) 100% Automatic Construction Development 100% Automatic Real Estate Business (except REITs) Prohibited – Gambling, Betting, Lottery Prohibited – Atomic Energy Prohibited – Sectors where FDI is prohibited Despite the liberal regime, there are areas where FDI is strictly not allowed. These include: Recent Policy Updates The FDI cap in insurance has been raised from 74% to 100% for companies investing their entire premium within India. This move is expected to attract global insurers and boost market competition. The government continues to streamline regulations, decriminalize minor offenses, and roll out digital processes to improve the investment climate. Most FDI now comes through the automatic route, reducing bureaucratic hurdles. Investments from entities in countries sharing a land border with India (e.g., China, Pakistan, and Bangladesh) require prior government approval, regardless of sector or amount. This is a national security measure introduced in recent years. Where Is FDI Flowing? India attracted a record $81.04 billion in FDI in FY 2024–25, with the top recipient sectors being: The leading states for FDI inflows are Maharashtra, Karnataka, and Delhi, with Singapore, Mauritius, and the United States as the top source countries. What Can You Invest In?      Here is a quick guide to sectors open for FDI and their potential: India’s flourishing technology ecosystem permits 100% FDI in software, IT services, and fintech. The government’s initiative for “Digital India” makes this sector particularly appealing. Thanks to the “Make in India” campaign, the manufacturing sector is highly accessible for FDI. Areas such as electronics, automotive, and pharmaceuticals are notably attractive. Single-brand retail: Up to 100% FDI (with conditions). Multi-brand retail: Up to 51% FDI, but subject to government approval and local sourcing requirements. The banking, insurance, and Non-Banking Financial Companies (NBFCs) sectors have experienced liberalization, with insurance now permitting up to 100% FDI for eligible companies. Additionally, FDI up to 100% is allowed under the automatic route in most NBFCs provided they engage in 18 specified activities (such as leasing, asset finance, etc.). 100% FDI is permitted in construction, industrial parks, airports, and certain railway activities, positioning India as an attractive destination for infrastructure investors. Both Greenfield and Brownfield pharma projects are open to substantial FDI limits, with the sector attracting significant foreign interest. 100% FDI is allowed in most agricultural activities (like horticulture, animal husbandry, etc.) and food processing, bolstering India’s food security and export goals.     How to Invest: Steps for Foreign Investors Final Thoughts India’s Foreign Direct Investment (FDI) framework in 2025 is considered one of the most liberal in the world, allowing nearly all sectors to have up to 100% foreign ownership via the streamlined automatic route. Nevertheless, investors should remain aware of specific sector limitations, compliance obligations, and restricted areas. By employing an effective strategy and conducting thorough due diligence, investors can access significant opportunities in one of the fastest-growing economies globally. juris consultants shubham Agarwalwww.jurisconsultants.in

The principle of birthright citizenship enshrined in the 14th amendment to US constitution guarantees that all individuals born on American soil, will be granted US citizenship irrespective of their parents immigration status. This doctrine has been a cornerstone of American identity and legal framework for over 150 years. However, recent political endeavors, notably Donald Trump’s executive order aiming to end birthright citizenship born to noncitizens, have ignited intense debates and legal battles. While this order currently faces injunction and has not been implemented, its potential enforcement raised significant concerns, particularly business owners in the US.  Most of the businesses in the US are backed by migrated skilled workers. They form the backbone of the US economy. Trump’s executive order to end birthright citizenship has introduced significant uncertainty for the skilled foreign workers in the US. This policy change which denied automatic citizenship to children born on US soil to non-citizens parents  has sparked legal challenges and widespread debates. Following will be impact on business owners: It’s crucial to note that any attempt to revoke birthright citizenship faces substantial challenges. The fourteenth amendment’s clear language was upheld by the US Supreme Court notably in the landmark case of US v Wong Kim Ark, which confirmed that the children born in the US, regardless of their parent’s nationality are citizens of the nation. The executive has met with an immediate legal response. A federal judge in Washington has issued a temporary restraining order blocking the implementation of Trump’s executive order. Conclusion  While the revocation of birthright citizenship is a theoretical scenario due to the ongoing legal injunctions, its potential implementation poses significant risks to US business owners. From talent acquisition challenges and operational complexities to broader economic implications the ripple effect can be profound. Business leaders should stay informed about these developments and proactively engage in discussions to safeguard their interests. also read “Benefits of Incorporating in the United States” http://www.jurisconsultants.in shubham Agarwalwww.jurisconsultants.in

Starting your USA business is an exciting and rewarding opportunity. The United States offers a dynamic and strong business environment, making it one of the best choices for business establishment. This blog will walk you through the step-by-step process of how to start your business in the USA, highlighting everything you need to know to successfully launch your company in this thriving economy. www.jurisconsultants.in Choosing the Right Business Structure: The first and foremost important step is choosing the right business structure in the USA, but not all options are available to foreign citizens. The most preferred business types for non-USA residents are: Conclusion In short, starting a business in the USA requires meticulous planning and attention to both the formation process and ongoing compliance obligations. Each step, from choosing the right business structure to registering with the appropriate authorities, is crucial in creating a strong foundation for the business. Staying compliant with tax, reporting, and all the regulatory requirements is equally important to ensure that the business continues to operate smoothly and avoid penalties. As Legal Professionals, we at Juris Consultants Inc. understands the intricacies involved in starting a business in the USA and we specialize in helping the entrepreneurs to navigate such complexities by offering expert guidance on every aspect of the incorporation process. shubham Agarwalwww.jurisconsultants.in