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Home Blog FDI Press Note 3 Amendment — 10 March 2026

Cabinet Amends FDI Press Note 3: Land Border Country Investment Rules Overhauled — What Indian Businesses and Investors Must Know

🔴 Breaking — 10 March 2026 FEMA / FDI Cabinet Decision 9 min read 10 March 2026 · Shahi & Co., Chartered Accountants

In a landmark policy decision on 10 March 2026, the Union Cabinet chaired by Prime Minister Narendra Modi approved sweeping amendments to India's FDI guidelines governing investments from Land Bordering Countries — the rules commonly known as Press Note 3 or PN3. The changes unlock the automatic investment route for minority LBC investors, introduce a formal beneficial ownership definition aligned with PMLA 2005 standards, and mandate a 60-day clearance window for priority manufacturing sectors. For Indian startups, PE/VC funds with global limited partners, and manufacturing businesses in electronics and capital goods, this is the most significant FDI policy development in six years.

In This Article
  1. What Is Press Note 3 and Why It Matters
  2. The Two Key Changes Approved by Cabinet
  3. Beneficial Ownership: Definition Now Codified
  4. The 10% Non-Controlling Route — In Detail
  5. 60-Day Approval Window: Sectors and Conditions
  6. Which Countries Are Land Bordering Countries?
  7. Impact on Indian Startups and Deep Tech
  8. Impact on PE/VC Funds and Global Investors
  9. Impact on Manufacturing: Electronics, Solar, Capital Goods
  10. Compliance Steps: What You Must Do Now
  11. Risks and Safeguards That Remain
  12. Frequently Asked Questions

1. What Is Press Note 3 and Why It Matters

Press Note 3 of 2020 (PN3) was introduced by the Department for Promotion of Industry and Internal Trade (DPIIT) on 17 April 2020 — during the peak of the COVID-19 pandemic — to protect Indian companies from opportunistic takeovers by entities from countries sharing a land border with India.

The core rule under PN3 was simple but sweeping: any investment from a Land Bordering Country (LBC), regardless of size or intent, required prior government approval. There was no minimum threshold, no distinction between strategic and passive investments, and no timeline for processing approvals.

1
April 2020
Press Note 3 Introduced
All FDI from Land Bordering Countries placed under mandatory government approval route. Primary intent: prevent Chinese entities from acquiring stressed Indian companies during the COVID-19 crisis.
StartupsDelhiCompany Registration

Startup Registration in Delhi — Complete Process and Costs for 2026

By Shahi & Co. March 2026 New Delhi

Delhi is home to one of India's most active startup ecosystems — with hubs ranging from the established tech cluster in Gurugram and Noida to the emerging deep-tech and fintech community in the city proper. If you are founding a startup in or around Delhi in 2026, this guide takes you through every step of the registration process — entity selection, MCA incorporation, Startup India recognition, and the realistic costs involved.

Choosing Your Entity — Pvt Ltd vs LLP vs OPC

The entity structure you choose at incorporation shapes your compliance obligations, fundraising ability, and tax position for years to come. For Delhi-based startups, the choice almost always comes down to three options:

🏢
Best For Funded Startups
Private Limited Company
The standard structure for any startup seeking external investment. Angel investors, VCs, and PE funds will only invest in Pvt Ltd companies. Allows ESOPs, multiple classes of shares, and external shareholders. Higher compliance burden but maximum flexibility.
🤝
Best For Professional Firms
Limited Liability Partnership
Well-suited for professional services firms — consulting, design, law, accounting. Lower compliance burden than Pvt Ltd. Cannot issue shares or ESOPs. Not suitable if you plan to raise institutional capital. Works well for partnerships where all founders are active.

OPC — One Person Company

If you are a solo founder bootstrapping a business with no immediate plans for co-founders or investors, the OPC structure offers limited liability without the complexity of a Pvt Ltd. However, OPCs cannot be converted to Pvt Ltd without a process — if you anticipate bringing in co-founders or investors within 2-3 years, start as a Pvt Ltd from day one.

Private Limited Company Registration in Delhi — Step by Step

The MCA has significantly streamlined the incorporation process in recent years. For a Delhi-based startup, the end-to-end process typically takes 7 to 15 working days, assuming all documents are in order.

1
Step 1
Obtain Digital Signature Certificates (DSC)
All proposed directors must have a Class 3 DSC. These are obtained from MCA-authorised Certifying Authorities. Typically takes 1-2 days with Aadhaar-based e-KYC. Cost: approximately ₹1,000-1,500 per director.
2
Step 2
Apply for Director Identification Number (DIN)
DIN is now integrated into the SPICe+ form — it is applied for and allotted as part of the incorporation process itself. No separate application required for new companies.
3
Step 3
Name Reservation via RUN or SPICe+
Propose up to two names in order of preference. Names must comply with MCA naming guidelines — avoid names identical or similar to existing companies, names that imply government association, or names that are purely descriptive. Delhi-based founders often try to incorporate city or locality references; this is fine as long as the name is distinctive.
4
Step 4
File SPICe+ Form (Simplified Proforma for Incorporating Company Electronically)
SPICe+ is the single integrated form that handles incorporation, DIN allotment, PAN, TAN, GSTIN (optional), EPFO registration, ESIC registration, and profession tax registration (where applicable) in one filing. For Delhi-based companies, attach the registered office proof — lease agreement or NOC from property owner, and a utility bill in the company's name or the owner's name for the registered address.
5
Step 5
Draft and File MOA & AOA
The Memorandum and Articles of Association define your company's objects and internal governance rules. For startups, the AOA should include provisions for ESOP pools, drag-along and tag-along rights, and anti-dilution protections — particularly if you plan to raise a seed round within 12-18 months of incorporation. A startup-friendly AOA from inception saves expensive amendments later.
6
Step 6
Receive Certificate of Incorporation
Once the Registrar of Companies (RoC), Delhi & Haryana approves the filing, you receive the Certificate of Incorporation electronically. The CIN (Corporate Identification Number) is allotted. PAN and TAN are also issued simultaneously. The company is now legally in existence.

Startup India Recognition

DPIIT recognition under the Startup India scheme is worth applying for immediately after incorporation. The benefits are substantial:

  • Section 80-IAC tax holiday — 100% deduction on profits for any 3 consecutive years out of the first 10 years, subject to DPIIT certification and CBDT approval
  • Angel tax exemption — DPIIT-recognised startups are exempt from Section 56(2)(viib) on share premium — a major benefit when raising seed funding from angels or family offices
  • Self-certification of labour laws — Reduces compliance burden in the early years
  • Fast-track IP applications — Patent applications from DPIIT-recognised startups are processed on priority, with an 80% rebate on patent fees

Eligibility

To qualify for Startup India recognition, the entity must be incorporated as a Pvt Ltd, LLP, or registered partnership; be less than 10 years old; have annual turnover below ₹100 crores; and be working towards innovation, development, or improvement of products/processes/services. The application is filed online at the Startup India portal — our New Delhi practice can assist with the application and any required certifications.

GST Registration for Delhi Startups

GST registration is not mandatory below the turnover threshold (₹20 lakhs for services, ₹40 lakhs for goods), but most Delhi startups register voluntarily from day one for two reasons: it allows you to claim input tax credit on your business expenses (rent, office supplies, software, professional fees), and it is required for B2B sales — corporate clients will demand a GSTIN before paying you.

The GST registration process through SPICe+ at incorporation is seamless. If you are registering separately post-incorporation, the ARN (Application Reference Number) is generated within 1-2 days and the GSTIN is typically allotted within 7 working days.

Realistic Cost Estimates for Delhi Founders

ItemApproximate CostNotes
MCA government fees (₹1 lakh authorised capital)₹0Nil for companies with authorised capital up to ₹15 lakhs
Digital Signature Certificates (2 directors)₹2,000–3,000Class 3 DSC, valid 2 years
Professional fees (CA/CS for SPICe+ filing)₹5,000–15,000Varies by complexity of MOA/AOA
Stamp duty on share subscription (Delhi)₹100–500Based on authorised capital and state rates
Startup India DPIIT recognition₹0Government portal — no fee
GST registration₹0Government portal — no fee
Opening current account₹0 to ₹10,000Varies by bank and account type
Total typical range₹8,000–30,000For a straightforward 2-director Pvt Ltd in Delhi

Post-Registration Compliance — Year One

Incorporation is the beginning, not the end, of your compliance obligations. Delhi-based startups in their first year need to manage:

  • Form INC-20A — Declaration of commencement of business, to be filed within 180 days of incorporation. This is mandatory and non-filing leads to strike-off proceedings
  • First board meeting — Must be held within 30 days of incorporation
  • Statutory registers — Register of members, register of directors, register of charges must be maintained from day one
  • Annual compliance — Even if your startup makes no revenue in year one, you must file MGT-7A (annual return) and AOC-4 (financial statements) with the MCA, and file income tax returns
  • TDS compliance — From the moment you have employees or pay professional fees above the threshold, you are a TDS deductor and must file quarterly TDS returns

Our startup advisory practice in New Delhi works with early-stage founders across Delhi NCR on both the incorporation process and the ongoing compliance calendar. We offer fixed-fee startup packages that cover the first year of compliance so founders can focus on building their product rather than managing regulatory paperwork.

Need Expert Guidance?

Our team of Chartered Accountants in New Delhi is available to assist Delhi NCR businesses and clients across India with personalised advice.

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Shahi & Co. · Start-up Registration
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