Indian businesses with a company abroad

When an Indian company or founder owns a company in another country, two sets of rules apply at once. The other country has its tax and company law. India has its overseas investment rules under FEMA, which follow the investment for as long as you hold it. We look after both.

Checked against the sources on 14 November 2026. Each figure links to the authority that published it.

What India asks of you

Before the first remittance
Form FC to your bank, and a UIN from the RBI1
Within six months
The share certificate or other proof of the investment, to the bank2
31 December each year
An Annual Performance Report for every overseas company2
15 July each year
The FLA return to the RBI3
The audit
The APR needs audited accounts when you control the overseas company2

Checked against the sources on 14 November 2026.

Talk to us about your company abroad

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The audit rule that catches small subsidiaries

The Annual Performance Report has to be based on the overseas company’s audited financial statements. Unaudited statements are accepted only where you do not control the company and the other country does not require an audit.2

Many countries excuse small companies from audit. Singapore, the United Kingdom and Ireland all do.4, 5, 6 That exemption does not help with the APR. A wholly owned subsidiary is controlled by its Indian parent, so its accounts have to be audited for the APR even when local law does not ask for it.

The practical point is timing. An audit arranged in December is unlikely to be finished by the 31st. Check in September whether each overseas company has an auditor.

Eight countries compared

CountryCorporate income taxKnow this before you incorporate
United States21% federal, plus state taxes7A US company with a foreign owner of 25% or more files Form 5472 every year. The penalty for missing it is $25,000.8
United Kingdom25%, or 19% on profits up to £50,0009Directors can live abroad. Each one verifies their identity with Companies House.10, 11
GermanyAbout 30% with trade tax12A GmbH needs €25,000 of capital and a notary. A UG can start with less.13, 14
Netherlands19% up to €200,000, then 25.8%15A BV is set up by a civil-law notary, and its capital can be €0.01.16
Ireland12.5% on trading income17One director must live in the European Economic Area, or the company puts up a €25,000 bond.18
Singapore17%19One director must be ordinarily resident in Singapore.20
Australia30%, or 25% for base rate entities21One director must ordinarily reside in Australia.22
United Arab Emirates9% above AED 375,00023A mainland company can be fully foreign-owned in most activities.24

What we do

  • Compare countries and company types in writing before you decide
  • Incorporate the overseas company and register it for tax
  • Prepare Form FC and the papers your bank needs before the first remittance
  • Keep the overseas company’s books and prepare its returns
  • Find an auditor abroad through licensed local firms, and prepare the audit file
  • File the APR and the FLA return each year

Questions we are asked

Can I send the money first and file afterwards?

No. The bank needs Form FC and the RBI issues the UIN before the first remittance.1 The steps are in our note ODI step by step.

The overseas company made no sales this year. Is an APR still due?

Yes. An APR is due every year for each overseas company. The exceptions are a holding of less than 10% without control, and a company in liquidation.2

What happens if the APR is late?

You cannot invest further in that company or transfer its shares until the delay is regularised. A late submission fee can be paid within three years of the due date.2

Does the FLA return apply to us?

It applies to an Indian company or LLP that held investment abroad, or foreign investment, at the end of March. It is due by 15 July and can be filed on provisional figures.3

Sources

  1. Reserve Bank of India, Foreign Exchange Management (Overseas Investment) Directions, 2022. A.P. (DIR Series) Circular No. 12, 22 August 2022.
  2. Reserve Bank of India, Foreign Exchange Management (Overseas Investment) Regulations, 2022. Notification No. FEMA 400/2022-RB, 22 August 2022.
  3. Reserve Bank of India, FAQs on the Annual Return on Foreign Liabilities and Assets. Updated 1 July 2026.
  4. ACRA, Audit exemptions: small company concept. Page updated 3 February 2026.
  5. GOV.UK, Audit exemption for private limited companies.
  6. Companies Registration Office, Audit exemption.
  7. Internal Revenue Service, Publication 542, Corporations.
  8. Internal Revenue Service, Instructions for Form 5472.
  9. HM Revenue and Customs, Rates and allowances for Corporation Tax.
  10. GOV.UK, Set up a private limited company: appoint directors and company secretaries.
  11. Companies House, Companies House confirms identity verification rollout from 18 November 2025.
  12. Germany Trade and Invest, Corporate taxation in Germany.
  13. Germany Trade and Invest, Setting up a GmbH.
  14. Germany Trade and Invest, Mini-GmbH (limited liability entrepreneurial company).
  15. Government of the Netherlands, Corporation tax.
  16. Business.gov.nl, Private limited company in the Netherlands.
  17. Revenue, Corporation Tax: basis of charge. Published 16 October 2026.
  18. Companies Registration Office, Duties of directors and secretaries.
  19. IRAS, Corporate Income Tax Rate, Rebates and Tax Exemption Schemes. Page updated 7 August 2026.
  20. ACRA, Choosing company directors and other key officers. Page updated 29 January 2026.
  21. Australian Taxation Office, Changes to company tax rates.
  22. ASIC, Company officeholders: directors and secretaries.
  23. UAE Government portal, Corporate tax. Page updated 28 October 2026.
  24. UAE Government portal, Full foreign ownership of commercial companies.