Open an LLC in India

Our law firm in India offers complete company incorporation services for local and foreign investors interested in opening a limited liability company (LLC).

What are the characteristics of the LLC?

The limited liability company is a business structure that is separate from its founders and where the investors are only liable up to the extent of capital they invest in the business.

Limited liability companies can be public or private, with differences in the following features:

• Paid-up capital: the paid-up capital for the public limited company is larger compared to the private one;
• Public shares: the public company can list its shares to the public, while the private one cannot;
• Shareholders: the private LLC can be incorporated by only 2 shareholders, the public one requires more members;
• Management: more company directors are required for the public company and, generally, they are subject to more complex requirements;
• Compliance: the public company will, given the nature of its public offerings, be subject to different accounting requirements.

In terms of incorporation, the steps are largely the same for both the public and the private limited liability company. You can read more about these below (with a focus on the private LLC).

What are the steps for LLC incorporation in India?

The five steps detailed below are the main ones that need to be followed when opening an LLC in India in 2026:

1. Obtain the director’s number: this is the identification number of the company director and can be obtained when he is physically present in the country or through a special process when this is not possible.
2. Obtain the digital signature: the company director must submit a digital signature that will be used on the company’s constitutive documents.
3. Obtain the name approval: the company name must be unique and an application for approval is submitted with the Registrar of Companies.
4. Submit the documents: once the company has a bank account and all the documents in order, these are submitted to the Registrar for obtaining the incorporation certificate.
5. Obtain a tax account number: this is required for income tax deduction purposes and one of our lawyers in India can assist you in submitting the documents with the Income Tax Department.

What documents are required for LLC incorporation in India?

The list of generally requested documents includes:

• The company’s constitutive documents, its Articles of Association and its Memorandum of Association;
• The director’s identification number for each individual who serves this role;
• Proof of identity for the directors and their digital signature certificates;
• Proof of registered address (must be located in India);
• Other, business-specific documents (such as adequately filled-in forms, prior approvals, etc.).

Can foreign investors open an LLC in India?

Yes. The country favours foreign direct investments, which means that non-residents can open a limited liability company.

Foreign entrepreneurs can open a company in India by observing the Companies Act 2013.

At the same time, foreign companies can also invest in India by means of opening a branch or a subsidiary.

What requirements apply to foreign direct investments in India?

Foreign investments in the country are regulated through:

1. Sector-specific policies;
2. Government policies;
3. Foreign exchange regulations and, in some cases, international agreements.

There are two applicable entry routes for permitted foreign direct investments:

1. The automatic route by which a non-resident does not require prior approval from the government or the Reserve Bank of India – this is favoured by those who open an LLC in India;
2. The government route, which, as the name suggests, requires prior approval.

Foreign direct investments are prohibited in sectors like gambling, lotteries, real estate businesses (with exceptions) and sectors that are not open to outside investment, such as the atomic energy sector.

Our team can help you understand the FDI policy that applies in the industry you want to invest in.

We also invite you to watch a short video about the Indian LLC:

How is the LLC taxed?

An LLC in India is subject to a number of taxes as well as certain annual filing requirements. Taxation is based on residence, and a company is considered a resident if it is incorporated in India or has its effective management location in the country (for the respective tax year). Resident companies, such as a newly incorporated LLC, are taxed on their worldwide income. The following tax rates apply:

• Corporate income tax: a standard 30% rate applies to domestic companies; a special taxation regime with a rate of 22% is also available, subject to certain conditions; two other rates of 15% and 25% corporate income tax can apply;
• Withholding tax: 10% or 7.5% in case of resident companies for dividend payments;
• Goods and services tax: 5%, 12%, 18%, 28% and a 0% rate for certain types of goods and services; the most common rate is the 18% one;
• Other taxes: 12% social security contributions for the employer; there is no payroll tax, no capital duty, and no net wealth or inheritance tax; real property tax is applied on a municipal level.

A surcharge applies in addition to the standard rate. This means that the effective tax rate has a value of 34.944% for domestic companies. A different rate, that is also subject to surcharge, applies in case of foreign companies.

Certain resident companies, such as those in the manufacturing sector, which were incorporated after 1 October 2019, can select a different, lower corporate income tax rate of 15% (to which a surcharge can apply). An alternative minimum tax, which can be explained by our team of tax lawyers, applies in case of companies with a tax liability of less than 15% of their book profits.

What is the financial year for companies in India?

Companies in India observe a tax year starting on April 1 and ending the following year on 31 March. In most cases, companies submit a final return by the end of October.

Are there any tax benefits for LLCs in India?

Limited liability companies can benefit from incentives when they operate in certain business sectors. For example, a deduction of 100% is available for payments made to an Indian resident company involved in scientific research activities. Deductions also apply when such a payment is made to an Indian college or university.

Our agents can help answer any questions about company formation in India in 2026 and the different requirements for incorporation. Contact our Indian law firm for more information and advice.

The same type of company can be opened in other jurisdictions too, including in European countries such as Germany. If you want to open an LLC in Germany, you should know that this type of company is known there as a GmbH and the corporate tax rate in Germany is 15% + solidarity surcharge of 5.5%.