Can a foreigner own a company in India?

Yes. A foreign individual or company can own up to 100% of an Indian private limited company in most sectors under the FDI 'automatic route', which needs no prior government approval — only a post-investment filing with the RBI under FEMA. A handful of sensitive sectors need government approval, and investors from land-border countries (e.g. China, Pakistan, Bangladesh) need prior approval under Press Note 3 regardless of sector. At least one director of an Indian company must be resident in India.

Do I need an Indian entity to sell to India?

Not necessarily. If you sell digital services to Indian consumers, you can register for GST as a foreign supplier (OIDAR) without any Indian entity — no subsidiary, PAN or local bank account. You only need an Indian entity if you want a real local presence (to hire, hold assets, sign local contracts, or sell goods through a local importer). Match the structure to the goal: digital sales = OIDAR; local operations = subsidiary; physical goods = importer/IEC route.

What taxes apply to a foreign company doing business in India?

Two separate systems. GST (indirect tax on consumption): foreign digital sellers to Indian consumers charge 18% IGST under OIDAR. Income tax (on profits): a foreign company can be taxed if it has a 'Significant Economic Presence' — ₹2 crore of India revenue or 3 lakh users — under Section 9(8)(d) of the Income-tax Act 2025, though a tax treaty (DTAA) usually protects sellers with no permanent establishment in India. The two are independent: OIDAR GST registration does not by itself create income tax.

Doing Business in India: a Foreign Company's Guide (2026)

If your business is outside India and you want to sell to or set up in India, the right structure depends on what you do. Selling digital services to Indian consumers? You register for GST as a foreign supplier (OIDAR) — no Indian entity needed. Want a real local presence to hire, hold assets or operate? Set up an Indian subsidiary (100% foreign ownership is allowed in most sectors under the automatic route). Selling physical goods? That’s an import / IEC route. This guide helps you pick.

The three paths

Most foreign businesses fit one of three routes into India. Start by identifying which describes you.

Path 1 — Sell digital services, no entity → OIDAR GST

If you sell SaaS, apps, online courses, streaming, e-books, cloud or digital ads to Indian customers, you fall under India’s OIDAR rules. When you sell to unregistered Indian customers (B2C), you must register for GST and charge 18% IGST from your first sale — no threshold. You do not need an Indian entity, PAN, director or bank account: a simplified Form REG-10 registration is done in your own company’s name, and you file a monthly GSTR-5A.

→ Read the full guide: GST for Foreign Businesses Selling to India (OIDAR), the post-October 2023 NTOR trap, or check your position with the Do I need GST in India? tool. To get registered and filed, see OIDAR Registration + Filing — from $399.

Path 2 — Operate here / want a presence → Indian subsidiary

If you want to hire in India, hold assets, sign local contracts, raise local revenue or build a team, you set up an Indian entity — usually a wholly-owned private limited subsidiary. Key facts:

100% foreign ownership is allowed in most sectors under the FDI automatic route — no prior government approval, only a post-investment FEMA filing with the RBI.
A few sensitive sectors need prior government approval, and Press Note 3 requires prior approval for investors from land-border countries (China, Pakistan, Bangladesh, etc.) in any sector.
At least one director must be resident in India.
Once incorporated, the company runs on the normal Indian compliance cycle — ROC annual filings, GST (if it sells in India), income-tax return, and an audit.

→ The entity path flows into our company plans: register a company (free with an annual plan that runs ROC / KYC / ITR, and GST on the Growth tier).

Path 3 — Sell physical goods / import-export → IEC + customs

If you ship physical goods into India, OIDAR does not apply — this is an import transaction. Typically an Indian importer of record clears the goods and pays IGST + customs duty at the border, and you may need an Importer-Exporter Code (IEC) and a local arrangement. This route is more involved and case-specific.

→ Talk to us to map your goods route.

GST vs income tax — keep them separate

Foreign businesses often conflate the two. They are independent:

	GST (OIDAR)	Income tax (SEP)
Taxes	Consumption — your sales to India	Profits attributable to India
Trigger	First B2C digital sale (no threshold)	Significant Economic Presence — ₹2 crore revenue or 3 lakh users
Basis	IGST Act, OIDAR provisions	Section 9(8)(d), Income-tax Act 2025
Relief	None for B2C — you must register	Tax treaty (DTAA) usually protects sellers with no permanent establishment, with a Tax Residency Certificate

Registering for OIDAR GST does not by itself create an income-tax liability. And the Equalisation Levy is fully abolished (2% e-commerce from 1 Aug 2024; 6% ads from 1 Apr 2025) — it is no longer a separate thing to file.

Which path is right for me?

I only sell digital products/services to Indian users → Path 1 (OIDAR). Fastest and lightest; no entity.
I want to hire, operate, or have a registered presence in India → Path 2 (subsidiary).
I ship physical goods into India → Path 3 (IEC / importer).
A mix → often Path 1 now (to be GST-compliant on digital sales immediately) and Path 2 later (when you commit to a local presence).

Not sure? Talk to us — we’ll point you to the right path and handle the compliance once you choose.

General guidance as of June 2026, not legal or tax advice for your specific situation. BatchWise coordinates OIDAR registration + filing for foreign digital sellers and company setup for those establishing an Indian presence.