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European companies in India: entry, structuring and the EU–India trade deal

Entry, structuring and tax for EU, UK, Swiss and Norwegian companies in India – what is the same for every European company, what changes by home country, and where the UK, EFTA and EU trade agreements stand.

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At a glance

European companies in India enter through the same mechanics whatever their home country: usually a wholly owned private limited company, an investment route set by the sector rather than the investor's nationality, and the same reporting to the Reserve Bank of India [1][2]. What the home country changes is the treaty rate on dividends, royalties and technical fees, whether staff posted to India can stay in their home social-security system, and which trade agreement applies [3][4]. The UK–India CETA has been in force since 15 July 2026 and the EFTA–India agreement used by Swiss and Norwegian companies since 1 October 2025, but the EU–India FTA, concluded on 27 January 2026, is not yet signed or in force [5][6][7][8].

Who this is for: Board members, CFOs, general counsel, and export and business-development heads of EU, UK, Swiss and Norwegian companies planning or reviewing their entry into India.

Same entry mechanicsA wholly owned private limited company, an investment route set by the sector, and FEMA reporting to the Reserve Bank of India – whatever the home country.
UK–India CETA in forceIn force since 15 July 2026, with the Double Contributions Convention for staff posted for up to 60 months.
EFTA–India TEPA in forceSwiss, Norwegian, Icelandic and Liechtenstein companies have traded under it since 1 October 2025.
EU–India FTA – not yet in forceConcluded on 27 January 2026; signature, European Parliament consent and ratification are still to come, so EU goods pay today’s Indian duties.
Treaty rates differ10% on dividends, royalties and technical fees under most European treaties; Belgian, Spanish, Italian and Danish parents face 15% to 20% on some payments.
The common ground

What is the same for every European company entering India

Doing business in India from Europe starts with mechanics that do not depend on where the parent sits.

  • The entity. Most operating businesses use a wholly owned private limited company; liaison, branch and project offices suit narrower purposes. Set-up steps, banking and filings are on India company incorporation and foreign investment.
  • The investment route. The sector sets it: barring a few sectors, foreign investment of up to 100% is allowed on the automatic route, without prior approval [1]. The exception that catches some European groups is ownership: an investor whose beneficial owner is from a country sharing a land border with India, such as China, needs government approval [9].
  • FEMA reporting. FEMA, India's exchange-control law, requires the Indian company to issue shares within 60 days of receiving the money and to report the issue to the Reserve Bank of India on Form FC-GPR within 30 days [2].
  • Treaty paperwork. India withholds 20% plus surcharge and cess on dividends, royalties and technical fees paid to a foreign company [10]. A treaty rate needs a tax residency certificate and Form 41, the successor to Form 10F; without a valid Form 41 the payer withholds at the domestic rate [11].
  • People. Staff working in India can create a permanent establishment, a taxable presence of the European company, whichever treaty applies: see permanent establishment in India, employees and employer of record.
By home country

What changes by home country

Three things move with the home country: the treaty rate, social security for posted staff and the trade agreement. The table links each corridor page; the general logic is in how your home country shapes your India entry.

Home country Treaty rate: dividends; royalties and technical fees [3] Staff posted to India [4][12] The point that matters most
Belgium 15%; 10% Agreement, up to 60 months Dividends bear 15% when the Belgian parent holds directly
Denmark 15% (holding of 25% or more); 20% Agreement, up to 60 months Royalties and technical fees bear 20%, the joint highest rate here
Finland 10%; 10% Agreement, up to 60 months 10% across the board, so direct holding and licensing are the usual start
France 10%; 10% Agreement, up to 60 months A protocol amending the treaty, signed on 18 February 2026, awaits French parliamentary approval [13]
Germany 10%; 10% Agreement, up to 48 months A shorter posting period than most: plan long secondments early
Ireland 10%; 10% No agreement Seconded staff cannot rely on a certificate of coverage
Italy 15% (holding of 10% or more); 20% No agreement The joint highest royalty and fee rate, and no social-security agreement
Netherlands 10%; 10% Agreement, up to 60 months India generally cannot tax a Dutch company's gains on Indian shares unless it holds 10% or more and sells to an Indian resident [14]
Norway 10%; 10% Agreement, up to 60 months Trades under the EFTA–India agreement, not the EU deal [6]
Spain 15%; 10% No agreement Dividends at 15%, and no social-security agreement
Sweden 10%; 10% Agreement, up to 24 months The shortest posting period of the agreements here
Switzerland 10%; 10% Agreement, up to 72 months Trades under the EFTA–India agreement [6]; the longest posting period
United Kingdom 10%; 10% or 15% Double Contributions Convention, up to 60 months The UK–India CETA has been in force since 15 July 2026 [5]

Each rate needs the paperwork above and enough substance to pass India's anti-abuse tests.

Trade agreements

The trade agreements: one in force, one waiting

UK–India CETA. The agreement and the Double Contributions Convention entered into force on 15 July 2026 [5]. UK exporters can claim lower Indian tariffs on goods that meet the rules of origin, UK suppliers can bid for covered central-government tenders, and staff posted by a UK employer can stay in UK National Insurance for up to 60 months [5][12]. How to claim, and what the deal leaves out, is in India–UK trade deal (CETA) in force: what UK businesses can use now (ATB Legal).

EU–India FTA. Negotiations concluded on 27 January 2026, and on 11 September 2026 the European Commission put forward its proposals to the Council for the signature and conclusion of the agreement [7]. It is not yet signed or in force: the Council must adopt the proposals, both sides must sign, the European Parliament must consent, the Council must conclude the agreement and India must ratify it [8]. Investment protection and geographical indications are separate agreements, still being negotiated [7]. Until the FTA applies, EU goods pay today's Indian duties. Tariff staging, rules of origin and CBAM are covered in EU–India trade deal (2026): status, FTA tariffs, rules of origin, CBAM and investment protection (ATB Legal).

EFTA–India TEPA. Swiss and Norwegian companies, with those of Iceland and Liechtenstein, trade under the EFTA–India Trade and Economic Partnership Agreement, in force since 1 October 2025 [6].

First questions

The first practical questions

Technology collaboration

Technology collaboration: which route to read

If you want to… Read
Earn from your technology without investing in India licensing your technology to an Indian company instead of investing
Appoint a distributor, integrator, contract manufacturer or licensee, and check it first finding and checking an Indian business partner
Turn a pilot with an Indian customer into a paid contract from pilot to paid contract with an Indian company
Sell to ministries and public-sector buyers selling to India's public sector as a European supplier
Join India's aerospace and defence supply chain as a tier-2 or tier-3 supplier aerospace and defence supply chain in India
Sell automation and robotics through Indian system integrators industrial automation in India through system integrators
Fund joint R&D with an Indian institute or company joint R&D funding open to European companies
Structuring

Structuring and investment

European business in India that goes beyond selling needs three decisions, in order. First, how to put equity in: India entry strategy: joint venture, acquisition or greenfield compares the routes on control, speed and cash. Second, where the Indian shares sit: for most European parents holding directly is the default, and choosing a holding company jurisdiction for India shows when a holding company earns its cost; parents facing 15% on dividends, and groups planning a sale to a foreign buyer, should read Netherlands or Luxembourg holding company for India. Third, how money comes home: for UK groups, see UK–India double tax treaty: guide for UK companies.

Worked example

Worked example (illustrative)

Hypothetical: a Danish water-technology company's first year in India. The rates and periods are those cited above; the sequence is our assumption.

  1. Months 1–3: test the market. The company files its trade mark in India, exhibits at a water-technology fair and prices quotes on today's Indian duty, as the EU–India FTA is not in force [8].
  2. Months 4–6: appoint a distributor after public-record checks, with exclusivity tied to minimum sales.
  3. Months 7–9: first projects. Engineers go on site with certificates of coverage, which keep them in Danish social security for up to 60 months [4]; their days in India are logged against permanent-establishment risk.
  4. Months 10–12: the subsidiary decision. The board weighs an Indian company for assembly and service. With 15% on dividends and 20% on royalties and technical fees under the treaty [3], it models the cash flows before choosing the mix, and tests whether a holding company elsewhere would pass India's anti-abuse rules.
Risks and common mistakes, ranked
  • Pricing EU exports on FTA tariff cuts before the agreement is signed and in force [8].
  • Assuming every European parent gets 10%. Belgian, Spanish, Italian and Danish parents face 15% on dividends, and Italian and Danish licensors 20% on royalties and fees [3].
  • Posting staff without checking social security. Ireland, Italy and Spain have no agreement, and Sweden's covers postings of up to 24 months [4].
  • Missing the tax residency certificate or Form 41, so the payer withholds at the domestic rate [11].
  • Late FEMA reporting: shares issued after 60 days, or Form FC-GPR filed late [2].
  • Treating Swiss or Norwegian operations as EU: they trade under the EFTA–India agreement [6].
  • Overlooking a land-border beneficial owner upstream, which puts the investment on the approval route [9].
Checklist

Checklist to forward internally

  • ☐ What India is for: selling, sourcing, licensing, R&D or investing
  • ☐ Sector checked for the investment route; cap table screened for land-border beneficial owners
  • ☐ Treaty rates on dividends, royalties and fees noted, against the domestic 20% plus surcharge and cess
  • ☐ Owner named for the tax residency certificate and Form 41 in each tax year
  • ☐ Staff postings mapped: visa, certificate of coverage, days in India
  • ☐ Trade agreement for each product identified: CETA, EFTA–India TEPA, or today's duty until the EU–India FTA applies
  • ☐ Holding structure and exit route decided before the first share issue
  • ☐ Form FC-GPR and other FEMA filings diarised
How ATB helps

ATB Corporate advises companies and investors on entering, structuring and operating in India and the UAE: choosing the entry route and holding structure, tax and exchange-control planning, regulatory compliance, and setting up and running the local business. To discuss your plans, contact ATB Corporate.

Questions

European companies in India, answered

A European company should first decide what India is for: a market to sell into, a source of supply, a base for licensees, an R&D partner or a place to invest, because each leads to a different structure. Selling can start from Europe or through a distributor, sourcing and licensing need no Indian company, and only investing raises the choice between a subsidiary, a joint venture and an acquisition.

UK and EU companies use the same Indian entity, investment route and reporting, but different trade, social-security and treaty terms [1][2]. UK exporters can use the UK–India CETA, in force since 15 July 2026, and UK staff posted to India can stay in UK National Insurance for up to 60 months [5][12]; EU exporters pay today's Indian duties until the EU–India FTA is signed and in force, and their posted staff depend on their own country's agreement with India [4][8]. The UK treaty rate on royalties and technical fees is 10% or 15%, against 10% under most EU treaties and 20% for Italy and Denmark [3].

European companies do not all get the same treaty rates in India: most treaties, including those with Germany, France, the Netherlands, Sweden, Finland, Ireland, Norway and Switzerland, give 10% on dividends, royalties and technical fees [3]. Belgian and Spanish parents pay 15% on dividends; Italian and Danish parents pay 15% on dividends (with holdings of at least 10% and 25% respectively) and 20% on royalties and fees; the UK treaty gives 10% on dividends and 10% or 15% on royalties and fees [3]. Each rate needs a tax residency certificate and Form 41 [11].

India's provident fund organisation lists social security agreements with 14 European countries: Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Luxembourg, the Netherlands, Norway, Portugal, Sweden and Switzerland [4]. The UK's Double Contributions Convention has applied since 15 July 2026, for postings of up to 60 months [12]. Ireland, Italy and Spain are not on the list, so staff they second to India cannot rely on a certificate of coverage [4].

The EU–India FTA does not apply to Swiss and Norwegian companies as such, because Switzerland and Norway are EFTA members and trade with India under the EFTA–India Trade and Economic Partnership Agreement, in force since 1 October 2025 [6]. A Swiss or Norwegian group with plants in the EU could use the EU agreement only for goods made there that meet its rules of origin, and only once it is in force [8].

A European group can use the UK–India trade deal through its UK subsidiary only for goods that originate in the UK under the agreement's rules: wholly obtained there, made from originating materials, or meeting the product-specific rule for that product [15]. Minimal operations such as packaging, labelling or simple assembly do not confer origin, so goods made in the EU and passed through a UK company do not qualify, and the UK exporter must register with HMRC before making origin declarations [15].

Sources
  1. Press Information Bureau (Ministry of Commerce and Industry), "FDI policy under continuous review to maintain India's attractiveness as an investment destination" (2 December 2025) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2197654&reg=3&lang=1 (accessed 20 October 2026)
  2. Reserve Bank of India, Master Direction – Foreign Investment in India (updated up to 15 June 2026), para 2.3 (issue within 60 days of receipt) and Form FC-GPR reporting (within 30 days of issue) — https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11200 (accessed 20 October 2026)
  3. Income Tax Department, "Tax Rates — DTAA v. Income-tax Act" (treaty rates on dividends, interest, royalties and fees for technical services) (2026) — https://www.incometaxindia.gov.in/w/%E2%80%8Btax-rates-dtaa-v.-income-tax-act (accessed 20 October 2026)
  4. Employees' Provident Fund Organisation, "International workers" (list of countries with social security agreements) — https://www.epfindia.gov.in/site_en/International_workers.php ; EPFO, operating social security agreement pages (posting periods): Belgium https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Belgium ; Denmark https://epfindia.gov.in/site_en/Operating_SSA.php?id=Denmark ; Finland https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Finland ; France https://epfindia.gov.in/site_en/Operating_SSA.php?id=France ; Germany https://epfindia.gov.in/site_en/Operating_SSA.php?id=Germany ; Netherlands https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Netherlands ; Norway https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Norway ; Sweden https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Sweden ; Switzerland https://www.epfindia.gov.in/site_en/Operating_SSA.php?id=Switzerland (all accessed 20 October 2026)
  5. UK Government (business.gov.uk), "Historic UK–India free trade agreement is in effect" (CETA and Double Contributions Convention in force 15 July 2026; government procurement access) (2026) — https://www.business.gov.uk/campaign/alive-with-opportunity/the-uk-india-trade-deal/ (accessed 20 October 2026)
  6. Press Information Bureau, "India–EFTA trade pact: boosting $100 billion investment and 1 million jobs" (TEPA in force 1 October 2025; EFTA members) (11 October 2025) — https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/oct/doc20251011663301.pdf (accessed 20 October 2026)
  7. European Commission (DG Trade), "EU trade relations with India" (FTA concluded 27 January 2026; proposals to the Council for signature and conclusion 11 September 2026; investment protection and geographical indications agreements being negotiated) (2026) — https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india_en (accessed 20 October 2026)
  8. European Commission, "EU–India trade agreement" (next steps to signature, conclusion and entry into force) (updated 11 September 2026) — https://commission.europa.eu/topics/trade/eu-india-trade-agreement_en (accessed 20 October 2026)
  9. Department for Promotion of Industry and Internal Trade, Press Note 2 (2026 Series), "Review of FDI policy on investments from countries sharing land border with India" (15 March 2026) — https://www.dpiit.gov.in/static/uploads/2026/03/b9da5830b052c2f2d788593e97d07c63.pdf (accessed 20 October 2026)
  10. Income Tax Department, Income-tax Act 2025, s.207 (20% on dividends, royalty and fees for technical services of foreign companies) — https://www.incometaxindia.gov.in/w/section-207-78 ; First Schedule to the Finance Act 2026 (surcharge on companies other than domestic companies) — https://www.incometaxindia.gov.in/w/first-schedule-104 ; "Foreign company" tax rates (health and education cess at 4%) — https://www.incometaxindia.gov.in/en/foreign-company (all 2026; accessed 20 October 2026)
  11. Income Tax Department, "Form 41 – Frequently Asked Questions" (Form 10F renamed Form 41 under the Income-tax Rules 2026; tax residency certificate uploaded with Form 41; no treaty benefit without a valid Form 41) (2026) — https://www.incometaxindia.gov.in/documents/d/guest/form-41-faqs (accessed 20 October 2026)
  12. GOV.UK, "UK–India Double Contributions Convention (DCC) explainer" (postings of up to 60 months; in effect 15 July 2026) (updated 17 June 2026) — https://www.gov.uk/government/publications/uk-india-trade-deal-double-contributions-convention-explainer/uk-india-double-contributions-convention-dcc-explainer (accessed 20 October 2026)
  13. Sénat (French Senate), Projet de loi n° 951 (2025-2026) authorising approval of the protocol amending the France–India tax convention, signed at New Delhi on 18 February 2026 (registered 16 September 2026) — https://www.senat.fr/leg/pjl25-951.html (accessed 20 October 2026)
  14. Income Tax Department, India–Netherlands Convention, synthesised text with the MLI, Article 13(5) (2026) — https://www.incometaxindia.gov.in/w/netherlands-synthesised-text-1 (accessed 20 October 2026)
  15. UK Government (business.gov.uk), "Rules of origin in India" (originating goods, minimal operations under Article 3.7, HMRC registration and origin declarations) (2026) — https://www.business.gov.uk/export-from-uk/markets/india/trade-agreement/rules-of-origin-in-india/ (accessed 20 October 2026)

Disclaimer: This article is general information, not tax or legal advice. Treaty rates, trade-agreement status and Indian rules change; check the current position and take advice on your own facts before acting.

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