Comparison Between Entities & Exit Strategy

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Choosing the Right Business Entity in India

When planning to enter the Indian market, a person resident outside India may establish a business entity in compliance with Foreign Direct Investment (FDI) norms. The most common options are:

Entity Type	Key Features	Eligibility	Taxation	Commercial Activity Allowed
Liaison Office in India	Non-commercial presence for communication and market research	3-year profit-making track record; Net worth ≥ USD 50,000	Not applicable (based on type of activity Equalisation levy may apply)	❌ Not allowed
Branch Office in India	Commercial presence for service-based activities (not manufacturing or retail trading)	5-year profit-making track record; Net worth ≥ USD 100,000	35% corporate tax	✅ Allowed (Limited Scope)
Project Office in India	Temporary setup to execute a specific contract secured from an Indian company	Valid project with funding from permitted sources	35% corporate tax (project-based)	✅ Allowed (Project-specific)
Private Limited Company / LLP	Fully operational Indian entity, eligible for FDI in LLP where automatic route and no performance-linked conditions exist	Subject to FEMA LLP norms and FEMA NDI Rules, 2019 as amended from time to time	Standard tax rates as applicable to Indian entities	✅ Fully Allowed

Particulars	Alternative I Public Limited Company	Alternative II Private Limited Company	Alternative III Limited Liability Partnership
Governing law	Companies Act, 2013	Companies Act, 2013	Limited Liability Partnership act, 2008
Minimum number of members	7	2	2
Maximum number of members	No limit	200	No limit
Compliance requirements to be adhered with	Very high	Low	Very low
Trading of shares on a stock exchange	Allowed	Not Allowed	Not Allowed
Raising of funds from public at large	Allowed	Not Allowed	Not Allowed
Issue of ESOPs	Allowed	Allowed	Not Allowed

Each structure serves different business objectives. Choosing the right entity depends on your commercial plans, compliance readiness, tax considerations, and desired market presence.

Exit Strategy for Foreign Entities

Planning your exit from the Indian market is as important as the entry. Foreign entities must follow FEMA-compliant exit procedures to ensure smooth closure and repatriation of funds.

Exit of Liaison or Branch Office

Submit closure request to the Authorised Dealer Category-I Bank with required documentation.
Upon approval, any remaining assets can be repatriated to the parent company abroad.
Ensures clean exit and regulatory compliance under FEMA.

Exit from Equity Investment in Indian Entity

Foreign investors may transfer their stake to another eligible investor, following FEMA NDI Rules, 2019 as amended from time to time.
If no buyer is found, the company may opt for strike-off under Companies Act, 2013, avoiding lengthy liquidation.
Repatriation of funds is allowed post-tax compliance and proper documentation.

Why Choose FEMABIDE Advisorz?

Expertise in FEMA FDI Structuring
Strategic Guidance on Entry & Exit Routes
End-to-End Support—from Incorporation to Closure
Quick Coordination with Banks, RBI & Authorities
Trusted by Global Companies Expanding into India

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Comparison Between Entities & Exit Strategy

Choosing the Right Business Entity in India

Exit Strategy for Foreign Entities

Exit of Liaison or Branch Office

Exit from Equity Investment in Indian Entity

Why Choose FEMABIDE Advisorz?

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