The Indian government has reported that 339 foreign companies were registered in the country over the past five years. However, the registration of such companies has declined steadily since 2020. Minister of State for Corporate Affairs Harsh Malhotra shared these details with the Rajya Sabha on Tuesday.
So far in 2025, five foreign companies have been registered in India—one each in Andhra Pradesh, Delhi, and Kerala, and two in Tamil Nadu.
Definition and Registration of Foreign Companies
Under Section 2(42) of the Companies Act, 2013, a foreign company refers to any entity incorporated outside India that establishes a place of business in the country, either physically or through an agent, including electronic operations. These businesses are typically set up with foreign capital.
Malhotra emphasized this definition while explaining the nature of these companies operating in India. He added that these entities must have a formal presence to conduct business within the country.
Declining Trend in Registrations
According to government data, 90 foreign companies were registered in India in 2020. This figure dropped to 75 in 2021, 64 in 2022, 57 in 2023, and 53 in 2024.
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The minister also addressed concerns regarding foreign entities conducting business activities online without registering. He clarified that no information regarding such activities is currently available in the MCA21 registry, which tracks corporate data and compliance.
The decline in foreign company registrations raises questions about India’s business environment, especially amidst global economic shifts and changing investment strategies. However, the government has not provided additional details regarding the factors contributing to this trend.
