Is the sector open, capped or closed? Who is the investor of record, and who ultimately owns them? This screen decides whether an application should be filed at all.
India entry · Hong Kong
Hong Kong Company Investing in India? Start With Press Note 3
A Hong Kong-registered company needs prior Indian government approval before it can invest in an Indian company — at any stake, in any sector open to foreign investment. That one rule, Press Note 3, orders everything about this corridor: the application comes before the incorporation, and the honest timeline runs in months, not weeks. ComplyKart is the Delhi team that prepares these cases — the approval application on the Foreign Investment Facilitation Portal, the beneficial-ownership pack behind it, and the Indian company that gets built once approval lands.
The short answer: yes, the route is open. No, it is not quick, and no, the March 2026 relaxation did not open it for Hong Kong-registered entities — DPIIT said so in terms when the relaxation was announced. What decides your outcome is the quality of the file you put in front of the government.
The approval file prepared like a case, not a form
Timelines stated plainly — months, not days
Hong Kong and Delhi hours overlap all day
CAs, CSs and advocates on one team
The rule that runs this corridor
Does Press Note 3 apply to a Hong Kong holding company?
Yes. Press Note 3 (April 2020) requires prior government approval for investment into India by any entity from a country sharing a land border with India — and for any investment whose beneficial owner is from such a country. DPIIT clarified on the record in 2026 that entities registered in Hong Kong are covered at any stake. There is no small-percentage exception and no sector exception.
Understand what the rule is actually screening. It is not a ban, and it is not aimed at Hong Kong commerce in general — Hong Kong capital with no land-border beneficial ownership still gets read carefully because the entity is Hong Kong-registered, and China-linked ownership gets read most carefully of all. The application is where you make your case: who owns the investor, where the money comes from, what the Indian company will do, and why the investment is genuine. Files that answer those four questions completely, in documents that agree with each other, are the files that move.
Now the 2026 change, because it is widely misread in Hong Kong. Press Note 2 of 2026 (15 March 2026, carried into the FEMA rules from 1 May 2026) eased the position for entities in non-border countries whose land-border beneficial ownership is 10% or less and non-controlling — they can use the automatic route again, with reporting. Read that sentence twice and notice who it leaves out: entities registered in China or Hong Kong. For you, nothing about March 2026 shortened the road. Anyone who tells a Hong Kong company otherwise is selling something.
The personal carve-out
I live in Hong Kong but I am an Indian citizen. Am I caught too?
Generally, no — and this is the one place the 2026 rules genuinely helped Hong Kong. The approval trigger now follows citizenship and place of incorporation, not residential address. An Indian citizen (an NRI) who merely lives in Hong Kong is not a land-border-country investor, and Press Note 2 (2026) removed the older "beneficial owner situated in" reading that had banks hesitating over exactly your case.
The distinction to hold: your address is Hong Kong; your citizenship is Indian; the rule looks at the second. So an NRI in Hong Kong investing personally follows the standard NRI/FDI analysis — no Press Note 3 approval. The moment the investor becomes your Hong Kong-incorporated company, the analysis flips, because the entity is registered there. Same person, same money, different investor on paper, different route. Choose the investor deliberately; do not drift into the corporate route out of habit if the personal route fits the plan, and do not choose the personal route to dodge a rule that would catch the structure in substance — the screening reads beneficial ownership, and a nominee arrangement is the fastest way to lose an application's credibility.
The closed doors
Which sectors can a Hong Kong investor not enter at all?
The sectors India closes to all foreign investment, from every country, approval or not: lottery, gambling and betting, chit funds, Nidhi companies, real-estate business outside the permitted development carve-outs, manufacturing of tobacco products, atomic energy, and railway operations beyond the permitted exceptions — as listed in the Consolidated FDI Policy.
Outside that list, expect scrutiny to scale with sensitivity. Defence, telecom, media and brownfield pharmaceuticals sit in approval territory or under caps for every foreign investor; for an applicant already inside the Press Note 3 process, those sectors mean a longer, harder file rather than a separate one. The practical order of work never changes: confirm the sector is open at all, then build the application for the sector you are actually in — an approval sought for a vaguely described "technology business" that turns out to touch a regulated activity is an approval that stalls.
The approval process
How the approval route runs, stage by stage
DPIIT's standard operating procedure works to an indicative 12-week decision target. Practitioners plan on three to six months for anything sensitive. We will plan your case on the honest range, not the target.
Filed on the Foreign Investment Facilitation Portal with the document pack: ownership chart to natural persons, source of funds, business plan, Hong Kong corporate records.
The proposal moves through DPIIT and the administrative ministry for your sector, with security screening in the loop. Queries come back; complete files answer them fastest.
Only after approval: incorporate the Indian company, remit the capital, allot shares and file FC-GPR within 30 days. Money moved before approval is a violation, not a head start.
Thinking of incorporating first and approving later?Do not. For a Hong Kong investor the sequence is the law: approval, then investment. Talk to us before any entity or account is created for this plan.
Your documents
What documents does the approval application need?
Two packs, really: the Hong Kong corporate pack that proves what the investor is, and the ownership pack that proves who stands behind it. The second is the one applicants underestimate.
Two packs. The Hong Kong corporate pack — incorporation certificate, business registration, articles, latest annual return, and the board resolution for the investment, apostilled at the High Court. Then the pack applicants underestimate: the ownership pack — shareholding chart to the ultimate owners, their IDs, and source-of-funds evidence. The second pack decides how your file is read.
The Hong Kong pack
Hong Kong documents for Indian use are apostilled through the High Court — Hong Kong sits inside the Hague system, unlike the mainland. Corporate records come from the Companies Registry.
✓Certificate of Incorporation and Business Registration certificate
✓Articles of association and the latest annual return / company particulars
✓Board resolution approving the Indian investment and the signatory for it
✓Shareholding chart up to the ultimate beneficial owners, with IDs for natural persons
✓Source-of-funds evidence for the investment amount
✓Business plan for the Indian company — activity, hiring, premises, projections
✓Passports and address proofs of the proposed Indian-company directors, apostilled
Consistency is the criterion: names, dates and share numbers must agree across every document in the pack. The commonest cause of a stalled Hong Kong file is not suspicion — it is two documents telling slightly different stories.
Treaty position
Does the India–Hong Kong tax treaty help an HK investor?
At the edges, yes. India and Hong Kong signed a double taxation agreement in 2018, which allocates taxing rights over dividends, interest, royalties and business profits between the two and provides relief from double taxation, claimed with a Hong Kong tax residency certificate. It does not touch the Press Note 3 approval requirement — tax and investment screening are separate gates, and both must be passed.
Founders sometimes arrive hoping a treaty, a free-port history or a clean banking record softens the investment screen. It does not; the screen is about ownership and origin, and it is passed on documents, not reputation. Where the treaty earns its keep is later — when the Indian company starts paying the Hong Kong parent for services, IP or capital, and withholding positions need to be set flow by flow. That is a second conversation, held after approval, with the actual payment flows on the table.
A word on contrast, because it explains the corridor's odd shape. Forming the Hong Kong company itself probably took you a day or two, with no resident-director rule and a registry that answers online. India, for you, is the reverse experience: slow at the gate, standard after it. Once approval is in hand, your Indian company's life — filings, FC-GPR, annual returns — is the same as any other foreign-owned company's. The corridor's difficulty is concentrated entirely at the entrance, which is exactly where we spend our effort.
Keep reading
Guides Hong Kong investors use
The approval route and the subsidiary mechanics, in more depth.
FDI routes in India: automatic vs approval, explainedHow the two routes divide the sectors, and where Press Note 3 sits inside the approval route.Read →
How a foreign company sets up a wholly owned subsidiary in IndiaThe subsidiary mechanics that follow once an approval-route investor gets the green light.Read →
Documents required for company registration in India for foreignersThe full foreign document pack and how legalisation works across countries.Read →
Apostille for company registration documents in IndiaHow the Hague apostille chain works — the system Hong Kong documents travel through.Read →
Other corridors
Entering India from a different country?
The route into India changes with the investor's country — the FDI route, the treaty position and the document chain are all different. Pick the corridor that matches where you are investing from.
United StatesFull ownership in most sectors, the Delaware-parent question, and FC-GPR once shares are allotted.
United KingdomCETA has been in force since July 2026. What it changes for a UK firm setting up — and what it leaves alone.
SingaporeHoldco-over-opco structuring, the ACRA-side paperwork, and the treaty position after 2017.
United Arab EmiratesFree-zone and mainland founders, CEPA, and the MOFA-plus-embassy document chain the UAE requires.
Hong KongDoes Press Note 3 catch a Hong Kong holding company? Yes — here is how the approval route works. You are on this page.
ChinaThe government approval route under Press Note 3: the application, the document pack, the realistic timeline.
All foreign foundersThe main India-entry page: entity choices, costs, the full process and answers for every other country.
Straight answers
FAQs: setting up in India from Hong Kong
Yes. Press Note 3 (2020) puts investment from land-border countries — and investment whose beneficial owner is from one — on the approval route. DPIIT clarified in 2026 that companies registered in Hong Kong are covered at any stake, in any sector. A Hong Kong holding company therefore needs prior government approval before investing in an Indian company.
For Hong Kong-registered entities, no. Press Note 2 (2026) restored the automatic route for entities in non-border countries with land-border beneficial ownership of 10% or less and non-controlling. A Hong Kong-incorporated investor is not in that class — it needs approval regardless of stake. The one genuine improvement for Hong Kong was personal: NRIs living there are no longer caught by residence alone.
Generally no. The Press Note 3 trigger follows citizenship and place of incorporation, not your residential address. An Indian citizen living in Hong Kong who invests personally follows the standard NRI investment analysis. If the investor is your Hong Kong company, the answer flips — the entity's place of registration is what the rule reads.
DPIIT's standard operating procedure sets an indicative target of about 12 weeks for a decision. In practice, practitioners plan on three to six months, with sensitive sectors at the longer end and complete, consistent files at the shorter one. Anyone quoting you a few weeks for a Press Note 3 approval is quoting the target, not the experience.
The Hong Kong company's incorporation and registration records, its articles and board resolution for the investment, a shareholding chart carried up to the ultimate beneficial owners with their IDs, source-of-funds evidence, and a business plan for the Indian company. Directors' documents follow for the incorporation stage. Every name and number must agree across the pack — inconsistency is the commonest cause of delay.
The same sectors India closes to all foreign investment: lottery, gambling and betting, chit funds, Nidhi companies, real-estate business outside permitted development, tobacco-product manufacturing, atomic energy and railway operations beyond the permitted exceptions. Other sensitive sectors are not closed, but they are approval-based for everyone and read harder inside a Press Note 3 file.
Yes, approvals are refused, and detailed reasons are not always shared. A refusal ends that application — the investment cannot proceed in that form. What improves your odds is unglamorous: an open sector, a transparent ownership chart, a credible business plan and documents that agree with each other. We screen all four with you before anything is filed, and we will tell you if a case should not be filed as drawn.
Ready when you are
Ready to set up in India? Talk to us — it's free.
Share your business activity, who will own the company and where you are based. We will map the entity, the document route from Hong Kong, the filing sequence and the compliance that follows. You receive the scope and costs in writing before you pay.
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Talk to ComplyKart in India
602, 6th Floor, Kirti Shikhar, District Centre, Janakpuri, New Delhi – 110058, India