LLP setup in India by a foreign company Foreign Individual and NRIs

Concept of LLP: LLP refers to Limited Liability Partnership, which is a hybrid of two laws, i.e., Companies Act and Partnership Act. It is governed and regulated under the LLP Act, 2008. Many small and medium foreign companies, individuals, and NRIs prefer LLP over Private Limited.

The main advantage of this entity structure is Limited Liability of Partners, it works like corporate but with less compliance and obligations. This makes LLP Setup in India by a Foreign Company easier. The Partners who can form an LLP in India can be an individual or a Foreign Body Corporate.

Three Basic Requirements to Setup a LLP in India

• FDI(Foreign Direct Investment) Guidelines: 

If a foreign Company, individual, or NRI wants to establish an LLP in India, they must evaluate eligibility for LLP setup in India by a foreign company. First, they need to check their eligibility as per the FDI guidelines issued by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, as amended from time to time.

Two routes: 

• Automatic route: Mostly service sectors like IT, consulting, trading, green energy, and manufacturing, etc., are under this route, where you can invest and hold 100% shares in an Indian LLP as a foreign company, individual, or NRI. This route is easier for LLP setup in India by a foreign company.
• Approval route: Where investment is allowed for foreign companies in Indian LLP, but up to a certain percentage, with terms and conditions, i.e., print media, defence, multi-brand retail trading, etc.

Most sectors are 100% allowed under the automatic route, so foreign investors can invest in an Indian LLP easily.

• Minimum Partners

As per the Indian LLP Act, a minimum of two Partners are required to form an LLP in India, which is a basic condition for LLP setup in India by a foreign company. The partners may be individuals or Body Corporate either combination of both. Out of which one Partner should be an Indian resident, means who stays in Indian atleast 120 days in a financial year.

• Registered Address

An LLP setup in India by a foreign company or an individual requires one address for LLP registration, a bank account, and GST/VAT, etc.

Steps to Set Up an LLP in India

The following are the 5 simple steps to Setup a LLP in India:

1. Indian LLP Setup

LLP setup in India by a foreign company is very easy; it is 100% online process with no physical requirement for partners to setup company and bank account activation. A foreign company or an individual can set up their LLP in India within 5-7 working days. The entire incorporation process is to be done via the online portal of the Registrar of Companies under the Ministry of Corporate Affairs in India

1. Name Reservation: Form RUN(Reserve Unique Name) LLP to be filed for name reservation, first, they need to apply unique name, or as per Name guidelines, the name should be unique and not resemble or nearly resemble existing Company/LLP and/or trademarks. 
2. Incorporation Application: Online Form LLPIN, after name reservation, needs to file incorporation documents, i.e., Proposed Partner’s consent, address proof, and ID proofs, etc.
3. Certificate of incorporation: After filling the online incorporation application, the RoC department will scrutinise the documents and information provided in it, and if all documents are in order, they will approve the same and issue a Certificate of incorporation.

2. Registered Address

As per the LLP Act, every LLP must have a registered address on its incorporation. Generally, new companies or LLPs prefer business centres, co-working spaces for the initial stage, once their business grow they shift to independent offices.

For the registered address following documents are mandatory:

1. Lease Deed
2. No objection certificate
3. The latest utility bill is not older than two months
4. Photographs of the office, inside and outside, with one of the partners.

3. Bank Account

Once LLP is incorporated with a registered address in India, then the next step is to open a Bank Account in the name of the LLP. We have both options, Indian Banks and global Banks, which can open the account easily. If all documents are in order, the banker generally takes 5-7 working days to open the bank account.

4. Capital Compliance

After incorporation, registered address, and bank account, the next crucial step for an LLP setup in India by a foreign company is to do initial capital compliance, as per the Indian LLP Act, there is no minimum capital required for LLP registration, however bank generally ask to open a current account for minimum INR 1,00,000 /USD 11,00 as this amount is justified as capital from foreign investor in India. The Capital compliance has to be reported with RBI(Reserve Bank of India) as FDI(Foreign Direct Investment) via online form filling FC-GPR within 30 days of shares allotment.

5. LLP Partnership Deed

As per the Indian LLP Act, within 30 days of incorporation, an LLP has to file its initial LLP deed between its partners relating to their business operations, capital investment, rights, obligations to each other, restrictions, if any, admission or resignation of partners, etc.

6. Post Compliances

Once capital compliance and reporting are done, the LLP has to do some post-compliance as per business requirements:

1. GST/VAT Registration
2. Professional Tax Registration
3. Shop & Establishment Registration, etc.

Conclusion 

LLP setup in India by a foreign company offers foreign companies, individuals, and NRIs a flexible and efficient structure with limited liability and relatively lower compliance requirements. However, understanding FDI guidelines, partner requirements, and post-incorporation obligations is essential to ensure a smooth setup process. With the right planning and execution, an LLP can serve as a practical entry vehicle for doing business in India. For structured support and seamless setup, businesses can consult the team at CorporateLegit for end-to-end guidance.

FAQ

1. Can a foreign company set up an LLP in India?

Yes, a foreign company can establish an LLP in India under FEMA regulations, subject to sectoral eligibility and FDI guidelines.

2. Is 100% foreign ownership allowed in LLPs in India?

In most sectors under the automatic route, 100% foreign investment is allowed, making LLP setup in India by a foreign company relatively straightforward.

3. What is the minimum requirement to set up an LLP in India?

A minimum of two partners is required, out of which one must be a resident in India. A registered address is also mandatory.

4. How long does it take to complete LLP setup in India by a foreign company?

The incorporation process is typically completed within 5–7 working days, subject to document readiness and approvals.

5. Is there any minimum capital requirement for LLP in India?

There is no minimum capital requirement under the LLP Act, but banks may require a practical amount for account opening.