Exit StrategyIndia
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Exit Strategy

India company exit and wind down for foreign investors

Voluntary liquidation under IBC, strike off under Companies Act, FEMA exit approvals, repatriation of residual funds, employee separation and regulatory deregistration for foreign companies closing India operations.

Counsel that connects the technical, the commercial, and the legal, across ten offices in India.
IBC
Voluntary Liquidation
Section 248
Strike Off
FEMA
Exit Compliance
10
India Offices
01

Exit routes for foreign companies in India

  • Voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016: requires special resolution and declaration of solvency.
  • Strike off under Section 248 of the Companies Act: available for companies with no assets or liabilities or that have not commenced business within one year.
  • Compulsory winding up by NCLT under Section 271 of the Companies Act in specific circumstances.
  • Closure of liaison office, branch office or project office through RBI approval process.
02

FEMA and RBI exit compliance

  • RBI approval for closure of liaison, branch or project office: Form FNC filing.
  • Repatriation of residual funds to foreign parent: AD bank certification and tax clearance certificate.
  • FDI exit: share transfer at fair market value determined by internationally accepted pricing methodology.
  • Final FLA return and closure intimation to RBI on FIRMS portal.
03

Operational wind down requirements

  • Employee separation: retrenchment compensation, gratuity, leave encashment and final settlement under Indian labour laws.
  • Contract termination and vendor settlement: notice periods, exit charges and pending obligations.
  • GST deregistration, PAN surrender, TAN cancellation and other regulatory deregistration.
  • Data migration and retention obligations under DPDPA and IT Act for personal data of Indian individuals.
04

How AMLEGALS assists

  • Exit route selection based on subsidiary status, liabilities and timeline requirements.
  • Voluntary liquidation or strike off application management from filing to closure.
  • FEMA exit compliance, repatriation structuring and RBI liaison.
  • Employee separation advisory, contract termination and regulatory deregistration coordination.
Answers

What clients ask before they commit.

Short, direct, on the record.

01What is the fastest way for a foreign company to close its Indian subsidiary?

Strike off under Section 248 is the fastest route if the company has nil assets and liabilities and has either not commenced business or has been inactive. Voluntary liquidation under IBC is faster than NCLT winding up, typically taking 6 to 12 months. The choice depends on the company status, pending liabilities and tax clearances.

02Can a foreign company repatriate the sale proceeds after closing its India subsidiary?

Yes. After obtaining tax clearance (no objection from income tax authorities), the residual funds can be repatriated through the AD bank. The repatriation must comply with FEMA pricing norms and the AD bank will verify the chartered accountant certificate confirming that all liabilities have been met.

03What are the employee obligations when closing India operations?

The employer must pay retrenchment compensation (15 days wages for every completed year of service), gratuity, leave encashment, notice period pay and any contractual severance. For establishments with 100 or more workers, prior government permission is required for retrenchment under the Industrial Disputes Act.

04How long does voluntary liquidation take in India?

Voluntary liquidation under IBC typically takes 6 to 12 months from the date of the special resolution. The liquidator must complete the process within 12 months, extendable by 90 days. Key steps include appointment of liquidator, creditor settlement, asset realisation, tax clearance and final dissolution application to NCLT.

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Share the entity type, current operational status and the preferred exit timeline for a preliminary assessment.

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