How to Open a Bank Account in India for a Foreign Company

I get this question from clients almost every month: “We have set up our company in India. Now how do we open the bank account?”

It sounds like a simple job, but it is the step where most foreign-owned companies lose time. Banks in India are careful with companies that have foreign shareholders, and I understand why. The paperwork is heavier and there are more checks. If you know what the bank will ask for, it goes much smoother.
In this blog we have explained checklist of documents ,steps to follow for Bank Account in India for a Foreign Company.

Here is how it works in practice.

First, Setup Foreign Company In India

A foreign company cannot just walk into an Indian bank and open a current account. You first need an Indian entity. For most people that means a private limited company, wholly or partly owned by the foreign parent. Liaison, branch and project offices are other options, but they come with RBI conditions and a different process.

Once your Certificate of Incorporation is ready, you can approach the bank.

Foreign Company  Bank Account Opening Types

A foreign-owned Indian subsidiary is a resident Indian company in law. It does not matter who owns the shares. So you open a normal current account, like any other Indian company. You do not need a special non-resident account for it.

Which bank should you choose?

This matters more than people think. Pick a bank that is an Authorised Dealer (AD Category-I) bank, meaning RBI allows it to handle foreign exchange.

Your share capital will come in from abroad, and the same bank has to issue the foreign inward remittance certificate (FIRC) and help with the FC-GPR filing. If the bank is not comfortable with foreign investment cases, you will lose weeks going back and forth.

My advice is to talk to two or three banks before you decide. Ask them plainly: “Do you have a team that handles foreign-owned companies?” The big private banks and large public sector banks usually do. Some smaller banks will say yes but then take a long time.

Documents Check list for Bank Account in India for a Foreign Company

Every bank has its own checklist, but this is what you should keep ready:

• Certificate of Incorporation
• Memorandum and Articles of Association (MOA and AOA)
• Company PAN
• Board resolution authorizing the account opening and naming the signatories
• Registered office address proof (rent agreement, utility bill, or NOC from the owner)
• KYC of the directors and authorized signatories (PAN, address proof, photo)
• Details of the foreign shareholders, such as the parent company’s incorporation documents and its directors
• Details of the ultimate beneficial owners, meaning the real people who own or control the group

Now the part that catches people out. Documents that come from outside India usually need notarization and apostille (or consularisation, depending on the country). The bank will not accept a plain scan of your parent company’s certificate. Start this early because it can take a week or two by itself.

Also, GST registration is not always needed before opening the account, but some banks like to see it. Ask your bank in advance so you are not stuck.

The step-by-step process – Bank Account in India for a Foreign Company

1. Choose the bank and meet the relationship manager. Tell them clearly that it is a foreign-owned company.
2. Submit the application with all the documents and the board resolution.
3. KYC and due diligence. For foreign-owned companies the bank does extra checks on the parent and the beneficial owners. This is the slow part.
4. Signatory verification. Many banks want the authorised signatory to be present in person or to do a video KYC. If your directors are abroad, check whether the bank allows this remotely. Having at least one resident Indian director as signatory makes life much easier.
5. Account activation, and then you get your cheque book, net banking and so on.

Normally it takes one to four weeks, but it can take longer if the documents are incomplete or the apostille is delayed.

After the account opens: bringing in the money

This is where the compliance part starts, and this is where, as an accountant, I see the most mistakes.

• The parent company must send the share capital through normal banking channels into this account.
• The bank issues the FIRC and the KYC report for the remittance.
• The Indian company must allot the shares within 60 days of receiving the money. If it does not, the money may have to go back.
• After allotment, file Form FC-GPR with RBI through your AD bank. The time limit is 30 days from the date of allotment. Late filing means a late submission fee and can bring bigger FEMA problems later.

Please do not treat this as a formality. I have seen companies get FEMA notices only because they forgot the FC-GPR deadline.

Common mistakes for Bank Account in India for a Foreign Company

Starting too late. People incorporate the company and then start collecting apostilled documents. Prepare these in parallel.

No resident signatory. If all directors are abroad, the bank may take much longer.

Weak address proof. A virtual office or an unclear rent agreement can get the application rejected.

Mixing money. Do not take the parent’s money in any other way, or bring it through someone else’s account. It must come directly, with proper documents, and the purpose should be clearly shown as share capital.

Not telling the bank the real business plan. The bank will ask what you do, who your customers are and where the money will come from. Give honest and clear answers. Banks get nervous when answers are vague.

My practical tips

• Make a checklist and send all documents together. Sending them in parts slows things down.
• Keep one person in your team as the bank’s single point of contact.
• Keep the parent company’s documents updated, such as the register of directors and the ownership chart. Banks love a clear ownership chart.
• Talk to your chartered accountant or auditor before the first remittance. Fixing a FEMA mistake costs far more than doing it right the first time.

Final words

Opening a bank account for a foreign-owned company in India is not difficult. It just needs patience and good preparation. If your documents are clean, your bank understands foreign investment, and you keep the FEMA deadlines in mind, the whole thing runs smoothly.

Rules and bank practices change from time to time, so please check the latest requirements with your bank and your professional adviser before you act. This article is general information and not advice for your specific case.

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Written by: –
Aishwarya. Jaiswal, ACCA