🇮🇳 India · reviewed 2026-10-09
Can foreigners own a business or franchise in India?
A franchisor that only licenses its brand to an Indian company makes no foreign investment at all. FDI rules start to matter only when the franchisor takes equity, and for food service they allow full foreign ownership.
When FDI rules apply
- A foreign franchisor that only licenses brand and know-how to an Indian-owned franchisee makes no foreign investment, so the FDI Policy's equity rules do not apply; royalties are paid as current-account remittances. FDI rules apply only if the franchisor takes equity in an Indian company. Official · DPIIT Consolidated FDI Policy, 2020-10-15
- Restaurants and food service are not a listed sector in the FDI Policy, so foreign investment is allowed up to 100% under the automatic route, subject to applicable laws and security conditions. Official · DPIIT Consolidated FDI Policy, 2020-10-15
- Single-brand product retail trading allows 100% FDI under the automatic route. Above 51% foreign investment, the Indian company must source 30% of the value of goods purchased from India. Official · DPIIT Consolidated FDI Policy, 2020-10-15
Getting royalties out
- Since May 2010, Indian banks can remit royalties and lump-sum fees under technology or brand agreements without government approval and without rate caps. Official · RBI circular, current account liberalisation, 2010-05-13
Structures franchisors use
- Master or development agreement with an Indian company: no FDI involved, royalties remitted as current-account payments.
- Joint venture or subsidiary for company-owned restaurants under the automatic route.
- Regional master covering India and neighbouring South Asian markets, where the partner can show a multi-country track record.
More on India
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