he first 12 months of compliance are a critical foundation for ensuring smooth, secure, and penalty-free operations for any foreign company entering India. Whether you choose a Wholly Owned Subsidiary (WOS), Joint Venture (JV), Branch Office (BO), or Liaison Office (LO) — each governed by RBI and MCA rules — establishing a strong compliance roadmap is essential for long-term success.
Month-Wise Compliance Checklist (With Due Dates)
| Month | Compliance Item | Due Date / Deadline |
|---|---|---|
| 1–2 | Entry route selection (WOS, JV, BO, LO) | Before beginning incorporation |
| 1–2 | Name reservation via RUN (MCA portal) | As soon as entity route decided |
| 1–2 | SPICe+ incorporation (PAN, TAN, DIN) | Within 30 days of name approval |
| 1–2 | Indian Resident Director appointment | At incorporation stage |
| 3–4 | Open current account (AD Bank) | Within 1 week of incorporation |
| 3–4 | FIRC for capital inflow | Immediately upon fund receipt |
| 3–4 | FEMA reporting (Form FC-GPR) | Within 30 days of share allotment |
| 3–4 | Internal accounting systems setup | Within 1 month of incorporation |
| 5–6 | GST registration | Before turnover exceeds threshold or as needed |
| 5–6 | PF, ESI, Professional Tax registration | Within 30 days of hiring first employee |
| 5–6 | TDS registration & return setup | Prior to first taxable transaction |
| 7–9 | MSME registration (if applicable) | Rolling, as soon as turnover/criteria met |
| 7–9 | Statutory registers & monthly accounts | Ongoing, monthly books closure |
| 7–9 | Payroll system & compliance calendar | Before first payroll |
| 10 | Form FLA (Annual RBI return) | By July 15 each year |
| 10–12 | Hold Annual General Meeting (AGM) | Within 9 months of financial year-end |
| 10–12 | ROC annual filings (AOC-4, MGT-7) | AOC-4: Within 30 days of AGM MGT-7: Within 60 days of AGM |
| 10–12 | Income Tax Return (ITR-6) | By November 30 each year |
| 10–12 | Compliance audit for gap analysis | Annually, before filing returns |
Month 1–2: Legal Incorporation & Structuring
1. Entry Route Selection
Choose the most suitable entry model — WOS, JV, BO, or LO — based on business goals and RBI eligibility guidelines.
2. Company Name Reservation
Reserve your company name via the RUN (Reserve Unique Name) service on the MCA portal.
3. Incorporation via SPICe+
Register using SPICe+ (Simplified Proforma for Incorporating Company Electronically). PAN, TAN, and DINs are auto-generated during this process.
4. Indian Resident Director Appointment
Appoint at least one Indian resident director as per Section 149(3) of the Companies Act, 2013.
💡 Real-World Tip: Japanese retail major MUJI successfully set up as a WOS using the MCA’s upgraded SPICe+ process, reducing incorporation time significantly.
Month 3–4: Banking & FEMA Compliance
1. Open a Current Account
Partner with an AD Category I bank to open a dedicated corporate account for foreign capital inflow.
2. Secure FIRC for Capital Inflow
Collect and submit Foreign Inward Remittance Certificates (FIRC) after receiving capital from overseas.
3. FEMA Reporting
File share allotment details and submit Form FC-GPR within 30 days of allotment.
4. Internal Accounting Setup
Hire finance staff or an top outsourced Accounting Service provider like Jordensky to establish compliant bookkeeping systems from Day 1.
🔍 Insight: Leading Japanese auto companies now use automated FEMA reporting tools to eliminate errors in FC-GPR filings and avoid regulatory penalties.
Month 5–6: Tax & Statutory Registrations
1. GST Registration
Register on the GST portal once turnover crosses the threshold (₹40 lakh for goods, ₹20 lakh for services) or if engaged in interstate supply.
2. PF, ESI, and Professional Tax
Enroll for Provident Fund (PF), Employee State Insurance (ESI), and Professional Tax (where applicable).
3. TDS Registration & Return Setup
Register for Tax Deducted at Source (TDS) and schedule monthly filings for Form 24Q/26Q.
💡 Example: Several European fintech startups have accelerated GST enrollment with the portal’s auto-verification process and instant GSTIN generation.
Month 7–9: Compliance Reporting & Operations
1. RBI Filings
Submit Form FC-GPR if not already filed within 30 days of share allotment.
2. MSME Registration
Register as an MSME if eligible to unlock subsidies, priority lending, and incentives.
3. Statutory Registers & Accounts
Maintain shareholding records, minutes of meetings, and proper books of accounts.
4. Payroll & Compliance Calendar
Automate payroll cycles, bank reconciliations, and set up a digital compliance tracker to avoid missed deadlines.
✅ Practical Tip: Many MNCs now use SaaS-based compliance management tools to receive automatic reminders for due dates.
Month 10–12: Annual Filings & Strategic Reviews
1. Form FLA Filing
Submit the annual Foreign Liabilities and Assets (FLA) Return to RBI before July 15 each year.
2. Hold First AGM
Conduct your first Annual General Meeting (AGM) within 9 months of the end of the first financial year.
3. ROC Filings
File AOC-4 (financial statements) and MGT-7 (annual return) with the Registrar of Companies.
4. Income Tax Return
File ITR-6 based on your company’s final audited accounts.
5. Compliance Audit
Conduct an independent audit to identify and correct compliance gaps before closing the financial year.
FAQs
Q1: What is the process to incorporate a foreign subsidiary in India?
Use SPICe+ for online incorporation, appoint an Indian director, reserve your company name, and complete legal documentation with MCA.
Q2: Which forms must be filed with RBI for foreign investment compliance?
Form FC-GPR (for share allotment) and Form FLA (annual assets/liabilities return).
Q3: When should GST registration be completed for a new subsidiary?
Register once you cross the prescribed turnover threshold or before starting taxable business operations.
Q4: What is Form FLA and who needs to file it?
All companies receiving foreign investment must file Form FLA annually to report foreign liabilities and assets to RBI.
Q5: Can a foreign company operate in India without incorporating?
Yes, but only as a Branch Office or Liaison Office, subject to RBI approval and with restrictions on activities.
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