Wholly-owned subsidiary, LLP, branch office, liaison office, project office or joint venture – every foreign company and NRI founder entering India faces the same first decision, and it shapes tax rates, compliance load and exit options for years. This page puts all the routes in one honest grid, then gives you a quick chooser by mission.
The master comparison
| Aspect | Subsidiary (Pvt Ltd) | LLP | Branch Office | Liaison Office | Project Office |
|---|---|---|---|---|---|
| Legal identity | Separate Indian company | Separate Indian LLP | Extension of the foreign parent | ||
| Ownership | Up to 100% foreign (automatic route, most sectors) | Up to 100% foreign (sectors without performance conditions) | n/a – parent operates directly | ||
| Activities | Anything lawful in FDI-permitted sectors | Same, minus restricted sectors | RBI-permitted list only (services, trading support; no retail/manufacturing outside SEZ) | Representation only – no income | The awarded project only |
| Entry test | None | None | Parent: 5-yr profits + USD 100k net worth | Parent: 3-yr profits + USD 50k net worth | Awarded contract |
| Income-tax rate | Domestic rates (~25% bracket; concessional regimes) | 30% flat + levies; profit share tax-free to partners | Foreign-company rate (35% bracket) on India profits; LO: no income permitted | Foreign-company rate | |
| Set-up time | 6–8 weeks incl. documents | Similar | 4–8+ weeks (AD bank) | 4–8+ weeks | Fast where general permission applies |
| Key filings | FC-GPR, FLA, MCA annual set, audit from day 1 | LLP(I), FLA, Form 8/11; audit above thresholds | AAC via AD bank, FC-3/FC-4, tax returns (BO/PO) | ||
| Fundraising/ESOP | Best – CCPS, ESOP, venture-ready | Weak | n/a | ||
| Repatriation | Dividends/buyback (with dividend taxation) | Profit share (single tax layer) | Branch profits remittable post-tax | n/a | Project surplus on completion |
| Exit/closure | Strike-off or winding up – slowest | Simpler | AD-bank closure – fastest | ||
Choose by mission
Subsidiary. Scale hiring, ~25% tax bracket, the new 15.5% safe harbour for the cost-plus model, ESOPs when needed.
Subsidiary guideLLP. One layer of tax, light compliance, clean profit repatriation – where the sector has no FDI performance conditions.
LLP FDI guideLiaison office. Representation and research with no tax presence – and strict discipline about not trading.
LO/BO/PO guideProject office. EPC/infrastructure contracts with a defined end date – then close through the AD bank.
LO/BO/PO guidePrivate limited – with the non-repatriation basis making your own capital paperwork-free.
NRI registration guideJV company. Same mechanics as a subsidiary plus a shareholders’ agreement that actually governs (board, deadlock, exit, non-compete).
Start with the WOS guideFive decision factors people underweight
- Tax-rate spread: subsidiary (~25% bracket) vs branch (35% bracket) is the largest recurring cost difference – it pays for a lot of compliance.
- The parent’s balance sheet: an office keeps Indian obligations on the parent directly; a subsidiary ring-fences them.
- Investor screening: land-border-country ownership above 10% or with control routes any structure through approval – check the 2026 PN framework early.
- Exit cost: offices close through the AD bank in months; a company wind-down is a project. If the venture is experimental, weight this heavily.
- Future funding: only the company takes CCPS/venture money and grants ESOPs; converting later costs time and tax.
Want a recommendation on your facts?
Share the mission, sector and 3-year plan – we will map the route, the tax outcome and the setup path.
Talk to My Cloud AccountantFrequently asked questions
What is the cheapest way for a foreign company to have presence in India?
A liaison office has the lowest running cost – but earns nothing. For revenue-generating presence, an LLP is usually the lightest compliant vehicle; a subsidiary is the most capable.
Why do most GCCs choose a subsidiary over a branch?
Lower tax bracket, freedom of activities, easier hiring/banking, ESOP capability, and the cost-plus model pairs with the 15.5% safe harbour. Branches suit narrow service mandates where parent-level consolidation matters more.
Can we start with a liaison office and upgrade later?
Yes – a common path: LO for 1–2 years of market study, then incorporate a subsidiary and close the LO. There is no automatic conversion; plan the hand-over.
Does an NRI have options a foreign company does not?
Yes – the Schedule IV non-repatriation basis (deemed-domestic investment) is exclusive to NRIs/OCIs, including for LLP/firm capital.
Rates and rules per the Income-tax Act 2025, FEMA (NDI) Rules 2019 as amended and RBI establishment regulations. Last reviewed: July 2026.