Cost of Setting Up a Company in India: 2026 Breakdown

The cost of setting up a company in India is low at the incorporation stage and higher every year after. For a private limited company with authorised capital up to ₹15 lakh, the Ministry of Corporate Affairs charges no SPICe+ filing fee, so a foreign-owned subsidiary can usually be incorporated for well under ₹1 lakh including professional fees. Running it costs more: audit, filings, tax returns, transfer pricing and a resident director typically add ₹1.5 lakh to ₹4.6 lakh or more a year on 2026 market rates.

Most cost guides stop at incorporation. This one separates official government fees from market rates, sets out a worked first-year budget for a UK parent, compares the cost of a subsidiary, LLP, branch and liaison office, and explains the 2026 tax changes that affect what a foreign-owned company pays its advisers. If you want an itemised quote for your own structure, our corporate services team prices India entry for UK, UAE and US businesses.

What is the cost of setting up a company in India in 2026?

Split the bill into three parts: what the government charges, what professionals charge, and what the company costs to keep alive each year. Only the first is fixed by law.

The MCA fee rises with authorised capital above ₹15 lakh, so there is no reason to authorise more capital than the company needs in its first year or two. Authorised capital can be increased later by filing with the Registrar.

Which costs are official and which are market rates?

This distinction matters because most rankings and agency packages mix the two. Official costs are the same whoever files for you. Market costs vary by firm, by city and by how much work is included.

Official or statutory costs

• SPICe+ incorporation fee: nil up to ₹15 lakh authorised capital.
• Stamp duty: set by each state on the Memorandum and Articles. It is paid electronically through SPICe+ and depends on where the registered office sits.
• PAN and TAN: issued through SPICe+; VJM Global lists about ₹1,011 to ₹1,017 for PAN with a foreign applicant and ₹77 for TAN.
• FC-GPR reporting: no government fee, but it must be filed on the RBI's FIRMS portal within 30 days of issuing shares to the foreign parent, under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
• Late filing fees: ₹100 per day per form for late annual filings such as AOC-4 and MGT-7, with no upper cap, under the Companies (Registration Offices and Fees) Rules as amended in 2018.
• Foreign document legalisation: for a UK parent, the FCDO Legalisation Office charges £45 per document for a paper apostille or £35 for an e-Apostille (gov.uk, October 2026).

Market costs

• Incorporation and FEMA advisory fees.
• Resident director services, if no one in the group lives in India.
• Bookkeeping, statutory audit, ROC filings and the corporate tax return.
• GST returns, if the company registers for GST.
• Transfer pricing documentation and the accountant's report.
• Registered office, which can be a real office, a co-working seat or a virtual office address accepted by the Registrar.

Worked example: first-year budget for a UK parent's Indian subsidiary

Assume a UK company sets up a wholly owned private limited subsidiary in India to run a small delivery team. It appoints two UK-based directors and uses a professional resident director, authorises ₹10 lakh of capital, and expects to invoice its parent for services. Official figures come from MCA, RBI and gov.uk; market figures are taken from VJM Global's and Stratrich's 2026 cost guides and are shown as ranges because firms price differently.

Two conclusions follow. First, the annual cost is roughly four to six times the setup cost, so a quote that looks cheap for incorporation tells you little about what you will spend. Second, the largest swing items are bookkeeping and transfer pricing, both of which depend on how many transactions the subsidiary has with its parent. A captive team billing its parent monthly on a cost-plus basis needs clean intercompany records from day one.

The budget excludes office rent, salaries, employer registrations such as provident fund, state professional tax and any sector licences, which depend on the business rather than the entity.

How much does a subsidiary cost compared with an LLP, branch or liaison office?

Entity choice changes both the setup bill and what the Indian presence is allowed to do. The setup ranges below are VJM Global's 2026 figures; the eligibility rules come from the RBI.

A branch is also taxed differently. A foreign company's Indian branch pays tax at a 35% base rate, reduced from 40% by the Finance (No. 2) Act, 2024, while a domestic subsidiary that opts for the concessional regime pays 22% plus a 10% surcharge and 4% cess, an effective 25.168%. For most foreign businesses planning to trade or employ people, the subsidiary is both cheaper to run and more flexible. Our guide on how to set up a company in India as a foreign business covers the entity choice in more depth.

What are the annual compliance costs of a foreign-owned company in India?

Every Indian company, however small, must have its accounts audited, hold an annual general meeting, file financial statements and an annual return with the Registrar, and file a corporate tax return. A foreign-owned company adds foreign investment reporting and, almost always, transfer pricing.

• First 30 days: hold the first board meeting and appoint the first auditor, both required within 30 days of incorporation under the Companies Act, 2013.
• Within 30 days of share allotment: file FC-GPR on the RBI FIRMS portal.
• Within 180 days: file the declaration of commencement of business (INC-20A), confirming subscribers have paid for their shares.
• Every year: AGM by 30 September for a 31 March year end; AOC-4 within 30 days and MGT-7 within 60 days of the AGM; director KYC; the corporate tax return; and, where the company has international transactions with its parent, the transfer pricing accountant's report.
• If registered for GST: periodic GST returns, and a Letter of Undertaking each year if services are exported to the parent without paying IGST. See our guide to export of services under GST.

Missing these dates is where cheap setups become expensive. The ₹100 per day late fee for each annual MCA form has no cap, so a company that skips two years of filings can owe more in late fees than it paid to incorporate.

How did the Income-tax Act 2025 change compliance costs?

India's Income-tax Act, 2025 and the Income-tax Rules, 2026 came into force on 1 April 2026. For foreign-owned subsidiaries the most visible change is in transfer pricing reporting. The accountant's report previously filed in Form 3CEB is replaced by Form No. 48 from tax year 2026-27, according to the Income Tax Department's FAQs on forms under the 2026 Rules and KPMG's March 2026 summary. FY 2025-26 is the last year reported in Form 3CEB, due on 31 October 2026.

The practical point for budgeting is that the report is required whenever the company has an international transaction with an associated enterprise, whatever its size. Under the 1962 Rules, detailed transfer pricing documentation was not required where the aggregate value of international transactions did not exceed ₹1 crore, but the accountant's report itself still had to be filed. Some cost guides conflate the two and suggest small subsidiaries need no transfer pricing work at all. That is wrong for any subsidiary that bills or is funded by its parent. Our transfer pricing services in India guide explains what the work involves and what it should cost.

Does it cost more if the parent is in the UK, UAE or US?

The Indian side costs the same whatever the parent's country. What changes is the cost of preparing documents abroad and the tax treatment of money flowing back.

• Document legalisation. Identity, address and parent company documents signed abroad must be notarised and apostilled or legalised. For UK parents the FCDO fee is £45 per paper apostille. US and UAE parents follow their own state or federal processes and fees, so ask for that line separately in any quote.
• Tax on repatriation. Dividends, service fees and royalties paid to the parent are taxed in India at rates that depend on the relevant tax treaty. Read our India–UK DTAA guide or the India–UAE DTAA guide before deciding how profits will move.
• Sector entry rules. Most sectors allow 100% foreign ownership under the automatic route, but some need government approval, which adds time and advisory cost. Investors from countries sharing a land border with India need government approval in all sectors. Our guide to FDI in India for UK companies sets out the routes.

UK businesses comparing options will also find our UK to India corridor page useful, and Indian-origin founders living abroad should read our separate guide to company registration in India for NRIs.

Cost traps to avoid when you register a company in India

• Comparing incorporation quotes only. A ₹10,000 incorporation package that excludes FC-GPR, auditor appointment and the first year's filings is not cheaper than a ₹40,000 package that includes them.
• Over-authorising capital. MCA fees and some stamp duties rise with authorised capital. Authorise what the first funding round needs.
• Late FC-GPR. Missing the 30-day window means a compounding or late submission process with the RBI, which costs far more than filing on time.
• No transfer pricing policy. Without an intercompany agreement and a pricing method agreed at the start, year-one documentation is rebuilt after the fact at higher cost.
• A nominee director with no real role. The resident director carries legal liability. Choose someone who will read the board papers, and price that properly.
• Ignoring permanent establishment risk. Staff in India who negotiate or conclude contracts for the parent can create a taxable presence for the parent itself. See our explainer on permanent establishment.

When should you not set up a company in India yet?

An entity is a fixed annual cost. It is the wrong first step when:

• You are hiring one to three people to test the market. An employer of record can employ them legally without an entity. Our guide to employer of record in India compares the costs.
• You only need market research or relationship building. A liaison office, or simply visiting customers, may be enough until there is revenue to book.
• The work could be bought from a vendor. If the capability is not core, outsourcing avoids audit, tax and transfer pricing costs entirely.

It is the right step when you expect a permanent team, need to own the capability and IP, want to invoice Indian customers, or are building a global capability centre in India.

How to budget your India setup: a checklist

1. Decide the entity and confirm your sector's FDI route.
2. Choose the state for the registered office and check its stamp duty.
3. Set authorised capital to what you will actually issue in the first two years.
4. Decide who the resident director will be and what that costs each year.
5. List every foreign document to be apostilled or legalised and price it.
6. Ask for a written quote covering incorporation, FC-GPR, auditor appointment, INC-20A and the first year of filings.
7. Agree the intercompany agreement and transfer pricing method before the first invoice.
8. Budget the annual running cost for at least three years, not just setup.

The Greenwolf view

The setup fee is the smallest number in an India entry decision. What matters is whether the structure fits the business: how the Indian company will be paid, how profits will return to the parent, who makes decisions and where, and whether the team creates tax exposure for the parent. Design that first and the compliance budget follows naturally. Choose the cheapest incorporation package first and you will often pay again to fix the transfer pricing, the FEMA reporting or the entity type.

Greenwolf Advisors helps UK, UAE and US businesses choose the right Indian entity, incorporate it, complete FEMA reporting and keep audit, tax and transfer pricing compliance on schedule. Speak to our team for an itemised three-year budget for your India setup.

This article is general information, not advice for a specific case. Fees change: confirm current government fees on the MCA portal and professional fees in writing before you commit.