How to Set Up an SPV (Special Purpose Vehicle) in India: 2026 Guide for Foreign Residents
- Matthew Ivo
- Dec 11
- 8 min read
India is rapidly consolidating its position as a preferred jurisdiction for foreign investors seeking transparent and efficient structures for asset holding, project financing, and cross-border investment. Through a properly established SPV (Special Purpose Vehicle), investors can ring-fence risks, streamline capital flows, and benefit from regulatory clarity under the Companies Act 2013 and the Reserve Bank of India (RBI).
This guide provides:
Step-by-step instructions to form an Indian SPV
Requirements for non-resident foreign investors (passport, nationality, documentation)
A comparison of SPV-style multi-currency accounts vs traditional Indian bank accounts
Ongoing compliance obligations (tax, remittance, foreign‑exchange controls)
An overview of key sectors using SPVs - including family offices and structured finance.
What is an Indian SPV, and why are they useful?
A Special Purpose Vehicle (SPV) in India is a distinct legal entity, created for a specific, narrow objective: asset holding, project finance, investment structuring, or liability isolation. For foreign investors, an Indian SPV offers the following advantages:
Regulatory clarity and compliance: Clearly governed under the Companies Act 2013 and regulated by RBI/SEBI where applicable.
Asset protection and liability isolation: Investments and assets held by the SPV remain separate from the investor’s other holdings.
Flexible corporate forms: Options include Private Limited Company, Limited Liability Partnership (LLP), or special‑purpose trust structures, depending on requirements.
Efficient cross-border and domestic investment: SPVs enable foreign capital inflow, domestic operations, and external financing with structured governance.
Use cases typically include real estate development, infrastructure projects, private equity funds, securitisation vehicles, intellectual property holding, and family office asset consolidation.
How to set up an Indian SPV: Step by step
Select the corporate structure
Choose between a Private Limited Company, LLP, or special-purpose trust, depending on investment goals and regulatory requirements.
Appoint directors & register a local office address
For a Private Limited Company, at least two directors are required - one of whom may need to be resident in India. A registered office address in India is mandatory.
Draft constitutional documents
Prepare a Memorandum & Articles of Association (MOA/AOA) for companies, or an LLP agreement for LLPs. Clearly state the SPV’s purpose, permitted activities, and governance clauses.
Obtain necessary regulatory approvals
Foreign-owned SPVs often require approvals from:
Reserve Bank of India for Foreign Direct Investment (FDI) inflow.
Securities and Exchange Board of India for fund or securities-related activities
Relevant state authorities for sector-specific compliance or permits.
Open an SPV bank account
Use a provider that supports multi-currency operations, segregated sub‑accounts by project or asset, and cross-border payments.
Non-resident requirements for setting up an SPV in India
To comply with Indian corporate, foreign‑investment and KYC/AML regulations, non-resident shareholders, directors, and beneficial owners must supply specific documentation and disclosures.
Passport & nationality requirements
Valid passport: All non-resident directors/shareholders must submit a notarised or apostilled passport copy.
Nationality disclosure: Mandatory in official incorporation forms (e.g. Simplified Proforma for Incorporating Company Electronically Plus (SPICe+) for companies; (Form for Incorporation of Limited Liability Partnership (FiLLiP) for LLPs) for RBI reporting.
Proof of non-resident status: Overseas residential address proof such as a utility bill, bank statement, or government-issued ID.
Director Identification & KYC: Non-resident directors must obtain a Director Identification Number (DIN) from MCA; their nationality and identity will be verified under standard AML/KYC requirements.
No requirement for Indian citizenship: Foreign nationals from any country may form an SPV, subject to compliance with FDI/sector-specific regulations.
Documentation requirements for shareholders, directors & incorporation
Non-resident shareholders/beneficial owners:
Notarised/apostilled passport copy
Proof of overseas address (utility bill, bank statement, or government-issued ID)
For corporate shareholders: Certificate of Incorporation, constitutional documents (MOA/AOA or charter), board resolution to invest, and list of authorised signatories.
Directors of the Indian SPV:
Notarised/apostilled passport copy
Proof of residential address
DIN, Digital Signature Certificate (DSC)
Local address proof of the resident director is required.
SPV incorporation documents:
Proposed company/LLP name (multiple options recommended)
Draft MOA & AOA or LLP Agreement
Registered office address proof (rental/ownership agreement, utility bill, or NOC)
For foreign investment compliance & banking:
Foreign Inward Remittance Certificate (FIRC) for capital inflow
KYC documentation for overseas remitter
RBI filings (e.g. Form FC-GPR) after share issuance to non-residents
Sector-specific/additional documents (if applicable):
SEBI or RBI approval letters for regulated sectors (e.g. funds, NBFCs)
State government or local authority permits (for real estate/infrastructure projects)
Tax registrations: PAN, TAN, GST (if applicable)
By ensuring all documentation, passport/nationality disclosures, and regulatory filings are complete, non-resident investors can establish a compliant SPV in India.
Compliance requirements for foreign-owned SPVs in India
Once operational, foreign-owned SPVs must adhere to multiple ongoing compliance obligations - corporate, tax, and foreign-exchange related - to maintain legal status and ensure regulatory transparency.
Corporate filings
Annual financial statements and returns to be filed with the Ministry of Corporate Affairs (MCA).
Maintain statutory registers, board resolutions, shareholder, and director records.
Ensure that the SPV’s activities remain within its defined corporate purpose.
Foreign exchange & remittance compliance
Abide by the provisions of the Foreign Exchange Management Act 1999 (FEMA) for all foreign investments and transactions.
File required forms (e.g. Form FC-GPR) after issuing shares to non-resident investors.
Report any capital repatriation, dividend payments, or loan repayments to the RBI in compliance with foreign‑investment rules.
Ensure cross-border transactions and remittances respect sectoral FDI limits and comply with sector-specific regulations when applicable.
Taxation & withholding obligations
Register for PAN (permanent account number) and TAN (tax deduction account number) for Indian tax compliance.
File corporate income tax returns under the Indian Income Tax Act.
If applicable, comply with Goods & Services Tax (GST) registration and filing requirements.
Deduct and remit Tax Deducted at Source (TDS) on payments made to non-resident entities or individuals (interest, dividends, and royalties).
Sectoral/regulatory compliance (if applicable)
For fund‑management, NBFC, structured‑finance or securities‑related SPVs — obtain necessary approvals from SEBI, RBI, or other authorities.
For infrastructure, real estate, or energy projects — comply with local state or municipal regulations, environmental clearances, and sector‑specific licences.
Maintain robust KYC / AML compliance for all shareholders, directors, and beneficial owners, especially for inbound foreign capital and recurring cross‑border transfers.
Engaging a professional corporate services provider or a dedicated relationship manager can streamline compliance, reporting, and ongoing governance - especially for complex multi-asset or multi-jurisdictional SPVs.
Growth of SPVs in India and key investment sectors: (2025/2026 outlook)
India’s SPV usage is accelerating rapidly, driven by increasing foreign interest in stable growth, predictable returns, and diversified opportunities. SPVs are especially popular in:
Sector | Use case / description |
Infrastructure & Real Estate | Highways, bridges, power plants, renewables, airports, commercial and residential developments |
Private Equity & Investment Funds | Pooled capital investment, fund structuring, syndication, and exits |
Structured Finance & Securitisation | Asset-backed securities, loan‑pool securitisation, debt instruments, debt‑capital structuring |
Intellectual Property & Asset Holdings | Holding IP, contracts, licences, receivables — enabling tax-efficient structure and asset protection |
Consolidating cross-border holdings, estate planning, succession structuring, and isolating family wealth under a corporate governance framework |
The growing complexity of global investment flows increased regulatory clarity, and rising demand for structured corporate vehicles makes SPVs an increasingly attractive instrument for foreign investors, family offices, and fund managers alike.
Traditional Indian business bank accounts for SPVs: Comparison Table
Bank / Account Type | Typical account types (for non-residents or Indian entities) | Suitability for foreign investors / SPVs | Key strengths | Key limitations |
HSBC India | NRE, NRO, FCNR (for NRIs / non-resident individuals) | Good for personal or NRI banking; may support business banking for locally incorporated companies | Foreign‑currency deposits (FCNR) Global banking convenience: worldwide access Interest repatriation and NRE/FCNR benefits for NRIs | Primarily designed for individual NRI clients not optimised for corporate‑level SPV operations.Multi‑currency corporate‑level operations constrained by banking and RBI policy |
Axis Bank | NRI Savings / NRE / NRO accounts for NRIs or non-resident individuals | Acceptable for simple banking or NRI-style flows; not ideal for multi-asset SPVs | NRI banking facilities with appropriate KYC Useful for Rupee-based local Indian operations or income flows | Business/corporate account approval usually requires a fully incorporated Indian entity Currency handling and segregated accounts lacking — not meant for complex SPV/cross‑border cash flows |
Kotak Mahindra Bank | NRI‑account offerings (NRE / NRO / FCNR) for NRIs/non-residents | Suitable for NRI banking or corporate banking after entity set‑up | Well-established private bank with a broad network Standard NRI banking services and familiarity | Limited flexibility for SPVs needing multicurrency, sub accounting, or project-level fund segregation Corporate account opening demands full registration, compliance, and documentation |
Why an Interpolitan Money SPV account is better than a traditional bank account
1. Multi-currency capability for international SPV operations
Hold, convert, and manage INR, USD, GBP, SAR, SDG and 50+ global currencies in one account.
Reduce exposure to FX risk when trading in INR and exotic currencies.
Access live spot rates, 24/7 currency execution, and competitive forward contracts.
2. Segregated SPV and project accounts
Create dedicated, ring-fenced sub-accounts for each SPV, project, or asset.
Use unique vIBANs to separate cash flows clearly and avoid intermingling.
Strengthen internal controls and simplify cross-border audits.
3. Efficient global payments and capital movements
Send and receive high-value payments in 160+ countries without a local bank account.
Access international networks including SWIFT, SEPA, and Faster Payments (UK & Channel Islands).
Support compliant capital inflows, repatriation, investor distributions, and cross-border transfers.
4. Rapid onboarding for non-resident SPV owners
Fast-track onboarding supported by an international KYC team.
Suitable for complex ownership structures and non-resident directors.
Operational SPV accounts can be activated within 48hrs of approval.
5. Simplified accounting, reporting, and treasury management
Automated reconciliation and consolidated statements across all entities.
Real-time cash visibility for smarter treasury and liquidity decisions.
Easy integration with internal systems to streamline reporting and compliance.
6. Reduced regulatory friction for foreign investors
Designed for SPVs with non-resident ownership, avoiding challenges associated with traditional bank accounts.
Helps maintain operational credibility and regulatory compliance from day one.
Supports lawful, transparent international investment flows.
7. Global safeguarding with Tier-1 financial partners
Client funds held in segregated safeguarding accounts.
100% liquidity with no withdrawal restrictions.
Regulated by the FCA (UK), DFSA (UAE) and FINTRAC (Canada).
8. Dedicated Relationship Management
Work with India and MENA sector specialists experienced in cross-border SPV operations.
Receive personalised support for payments, FX, compliance, and day-to-day queries.
Enhance operational efficiency across all SPV entities with 24/7 account access.
Key FAQs on forming an SPV in India
What is an Indian SPV, and why do foreign investors use them?
An Indian SPV is a standalone legal entity created for a specific purpose such as asset holding, project finance, or risk isolation. Foreign investors use SPVs for clear regulation, liability separation, and smoother cross-border investment flows.
What do non-resident investors need to set up an SPV in India?
Non-residents must provide a notarised passport, proof of overseas address, nationality details, and KYC/AML documents. Directors need a DIN and DSC. Corporate investors must supply incorporation documents and authorised signatory information.
Can foreign nationals fully own an SPV in India in 2026?
Yes. Foreign nationals can fully own an Indian SPV, provided they follow FDI and sector-specific rules. Indian citizenship is not required, and ownership can be through a company, LLP, or trust.
What are the main steps to set up an Indian SPV?
You choose the structure, appoint directors, register a local office, draft constitutional documents, obtain regulatory approvals, and open an SPV bank or multi-currency account. Foreign-owned SPVs must complete MCA filings and RBI reporting.
What compliance obligations apply to foreign-owned SPVs?
SPVs must file annual returns, maintain statutory records, follow FEMA rules for foreign transactions, file RBI forms for investments, and meet tax requirements including PAN/TAN, corporate tax, GST (if applicable), and TDS.
How do SPV multi-currency accounts differ from traditional Indian bank accounts?
Traditional NRE/NRO/FCNR accounts suit personal NRI banking, not complex SPV flows. Multi-currency SPV accounts offer 50+ currencies, segregated sub-accounts, global payments, and faster onboarding for non-residents.
Which sectors will see the most SPV growth in 2025/2026?
High-growth areas include infrastructure, real estate, private equity, securitisation, renewables, IP holding, and family office structures. These sectors rely on SPVs for funding efficiency and risk isolation.
Disclaimer: The information provided is for general guidance only and does not constitute legal, financial, or tax advice. Interpolitan Money does not offer advice on the formation of SPVs in India, choice of corporate structure, or regulatory compliance. Always seek guidance from a licensed professional before proceeding.
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