For most Russian companies the wholly owned private limited company is the practical choice: separate legal entity, limited liability, flexible funding and a clean exit. A liaison or branch office can suit a narrow purpose, but the RBI conditions are strict (a branch needs a USD 100,000 net worth and a five-year profit record; a liaison office USD 50,000 and three years) and banking a branch of a Russian company is harder than banking a locally incorporated company. A joint venture with an Indian partner is common in defence, energy, pharmaceuticals and engineering, and needs governance and sanctions clauses. Choose on liability, tax, banking, funding and exit.
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Key facts
| Private limited company | Separate entity, limited liability; default choice |
|---|---|
| LLP | Allowed in sectors with 100% automatic FDI and no performance-linked conditions |
| Branch office | Net worth USD 100,000 and 5-year profit record; limited activities; RBI approval |
| Liaison office | Net worth USD 50,000 and 3-year profit record; no commercial activity; RBI approval |
| Project office | For a specific contract; conditions on funding and approval |
| Joint venture | Shareholders' agreement with an Indian partner; sector cap and pricing rules apply |
| Sanctions | Branch and liaison offices keep the Russian parent directly exposed; a separate company contains some risk |
| Tax difference | Branch taxed as a foreign company at a higher rate than a domestic company (confirm the current rate); subsidiary at the domestic company rate |
Comparison
| Option | Liability | Activities | Tax outline | Main drawback |
|---|---|---|---|---|
| Private limited company | Limited to share capital | Any permitted business | Domestic company rate; dividends taxed on distribution | Compliance burden; two directors and shareholders |
| LLP | Limited to contribution | Services and permitted sectors | Taxed as a firm | FDI conditions; limited exit via shares |
| Branch office | Parent liable | Narrow, permitted activities | Foreign company rate on profits | Strict RBI eligibility; Russian parent exposed; banking difficulty |
| Liaison office | Parent liable | Representation only; no income | No Indian income; costs funded by parent | No revenue allowed; PE risk if it exceeds its remit |
| Project office | Parent liable | A specific contract | Taxed as a foreign company | Limited life; conditions on use |
| Joint venture company | Limited to share capital | Agreed scope | Domestic company rate | Partner disputes; sanctions and exit terms |
Wholly owned subsidiary
- Suited to sales, services, manufacturing, engineering and captive teams.
- Funding by equity, preference shares or compliant external commercial borrowing. See funding and FEMA.
- Profits can be repatriated as dividends after tax, subject to the treaty. See repatriating profits.
- Exit by share sale or buy-back. See exit and restructuring.
Branch, liaison and project offices
- A branch can carry out specified activities such as export and import, professional services, research, and representing the parent, but not manufacturing.
- A liaison office cannot earn income. All costs are met from inward remittance.
- A branch office is a PE of the parent, and profits are taxed in India as a foreign company.
- These routes keep the Russian legal entity on the Indian bank's books, which can make banking harder.
Joint venture
- Agree reserved matters, deadlock, transfer restrictions, non-compete, sanctions and exit terms before signing.
- Pricing rules apply to share transfers between a Russian investor and an Indian resident. See funding and FEMA.
- Consider governing law and arbitration seat early. See contracts, courts and arbitration.
- Defence and strategic ventures need licences and security clearance. See goods, trade and procurement.
How to choose
- Start with the business model: contracts and revenue in India point to a subsidiary.
- Check the sector cap and the sanctions and banking position.
- Compare liability: a branch exposes the Russian parent.
- Plan the exit and the repatriation route from day one.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Federal Tax Service (Russia), Bank of Russia and the Ministry of External Affairs (India).
Frequently asked questions
What is the best structure for a Russian company in India?
For most, a wholly owned private limited company, because it limits liability and is easier to bank, fund and exit.
Can I use an LLP?
In sectors with 100% automatic FDI and no performance-linked conditions.
What do I need for a branch office?
A net worth of USD 100,000 and a profit record for the preceding five years, with RBI approval.
What do I need for a liaison office?
A net worth of USD 50,000 and a profit record for three years, with RBI approval. It cannot earn income.
Is a joint venture easier?
It can open access to a partner, licences and a market, but needs strong governance and sanctions terms.
Why is a branch harder to bank?
The Russian parent itself is the account holder, which attracts the strongest due diligence.
How are branches taxed?
As foreign companies on Indian profits at a higher rate, with surcharge and cess; check the current rates.
Related guides
How to Incorporate a Private Limited Company in India as a Russian Parent: Sanctions Checks, SPICe+, Bank Account, Capital Inflow and First Filings
Step-by-step route for a Russian parent to set up an Indian private limited company: ownership and sanctions checks, name, SPICe+, DIN and DSC, resident director, PAN and TAN, bank account, capital inflow, FC-GPR and first filings.
Read the guide →Funding Your Indian Subsidiary from Russia: Equity, Preference Shares, External Borrowing, FEMA Reporting and the Remittance Route
How a Russian parent can fund an Indian company: equity and preference share pricing, 60-day allotment and FC-GPR rules, ECB, loans, FLA return, the remittance route through banks acceptable to India and Russian clearance.
Read the guide →Getting Money Out of India to a Russian Parent: Dividends at 10%, Service Fees, Royalties, Interest and Loan Repayments
How a Russian parent receives money from an Indian subsidiary: 10% treaty withholding, Section 393, Forms 41, 145 and 146, Russian tax treatment, payment routes acceptable to banks and the documents banks ask for.
Read the guide →Exiting an Indian Subsidiary from Russia: Share Sale, Buy-Back, Merger, Voluntary Liquidation and Tax on the Exit
How a Russian parent exits or restructures an Indian business: sale of shares, buyer sanctions checks, FEMA pricing, FC-TRS, capital gains tax, buy-back, merger, voluntary liquidation, strike-off, the treaty position and bringing proceeds home.
Read the guide →Sources
Last updated 26 October 2026. General information only, not legal or tax advice. Indian and Russian rules change often; confirm current requirements before acting.