If you formed a company in India from abroad, this post is for you.
Most foreign founders celebrate their Indian company registration and move on. What they don't know is that three compliance clocks started ticking the moment they incorporated β and missing even one of them triggers a penalty of up to 3x the entire investment amount.
Not 3%. Not 30%. 300%.
Here are the 3 compliance risks that hit foreign-owned Indian companies hardest:
π FC-GPR Not Filed
Every time your Indian company allots shares to a non-resident, Form FC-GPR must be filed with the RBI within 30 days. Miss it β and it's an automatic FEMA contravention.
A Bangalore SaaS founder raised $800K from a US angel. FC-GPR was filed β but with a valuation certificate from an unregistered CA. Technically filed. Actually defective. Nobody noticed until Series A due diligence in 2025. Four months in RBI compounding proceedings. βΉ2.8 lakh penalty. Almost lost the deal.
π± Transfer Pricing Gaps
Every transaction between your Indian entity and its foreign parent β services, cost allocations, royalty, anything β must be priced at arm's length and documented.
