Fika B’lore is a Scandinavian bakery in North Bangalore that Niklas and I co-founded and run as equal partners. It operates as a foreign-owned Indian private limited company. This page is the structured version of how we stood it up and what the machinery underneath it has taught us. The narrative version, with the actual texture of getting it wrong, is the essay What setting up a company in India actually is. This is the record.
The context
- A real operating business, not a holding shell: a bakery with a kitchen, staff, customers, and weekly delivery.
- Foreign owners, Indian company. We built it as a private limited company under India’s automatic route, which lets a foreign-owned company in most sectors exist without prior government approval.
- Based in Karnataka, within Bangalore. India’s second-largest state for inbound investment, which matters less to a bakery and more to anyone using this as a reference for their own entry.
- Food sector, which adds a licensing layer (FSSAI) that a services company would not carry. Worth separating, when reading this, what is general and what is ours.
What we built
The entity. A private limited company: name reservation, digital signature certificates, director identification numbers, the certificate of incorporation. The constraint that shapes everything for foreign founders is the requirement for at least one India-resident director. It reads as a footnote and decides whether two foreigners can actually hold and run their own company.
The registrations. GST, the FSSAI food license, Udyam for MSME status, professional tax under Karnataka, and shops and establishments registration. Each is its own portal and its own timeline. Several sit in a queue and move at the speed of someone else’s attention.
The premises. A commercial kitchen lease in Bettahalsoor. This was one of the easy parts for us: we found the space, signed, and that was largely that, against the horror stories I had braced for.
The foreign-capital path. Because foreign money funded the company, the shareholding is reported to the Reserve Bank under FEMA, through the FC-GPR filing, which carries a company secretary’s certificate and a valuation. For us this was lighter than warned, because the capital was already in the country before we needed it. For a founder bringing money in from outside at the moment of setup, it can be a real piece of work.
Money in. The bank account and the payment gateway were the genuine bottleneck. The account took months for reasons nobody could name. The gateway, Razorpay, now requires Aadhaar-based identity to onboard, as every gateway in India effectively does, and Aadhaar is not quick for a foreigner. Once live, UPI and the digital rails are excellent. Getting onto them is the hard part.
People. Hiring and employing staff locally, with everything that comes with being a real employer in India rather than a foreign company parking a few roles here.
What was harder than expected, and what was easier
- Harder: the FSSAI license (slow, queue-bound, needed persistent pushing), the bank account (months, unexplained), and getting a payment gateway live (Aadhaar-gated).
- Easier: the commercial lease, and the FEMA and FC-GPR reporting in our specific case, because the money was already here.
- The lesson in the split: you cannot predict which parts will be hard. The map of where the friction lives is not the one in the guides.
What went wrong, and what it taught us
The honest list, because this is where the useful part is.
- The FSSAI license stalled, not by rejection but by neglect. It kept settling to the bottom of the pile. The fix was not a better argument; it was presence, repeated follow-up, making it easier to process than to keep setting aside. The system does not refuse you, it deprioritises you.
- The bank account took months for reasons no one could explain. Not refused, just slow, with a different explanation every time.
- Payment-gateway onboarding is identity-gated. Aadhaar-based KYC is now standard for gateways, and a foreigner does not get Aadhaar quickly.
- The rules change constantly. GST rates move, FSSAI requirements get revised, and no one tells you. Keeping track is the ongoing tax of operating here, not a one-time setup cost. This is the single biggest thing.
- The resident-director requirement matters far more than it reads. It shaped how two foreigners could actually hold and run their own company.
What I would tell the next founder
Sequenced, because the order is the thing that is missing from every guide.
- Decide the entity and the resident-director question first. It constrains everything after it.
- Incorporate, then start the slow, queue-based registrations immediately, FSSAI above all. Push them actively; submitted and waiting is how they sink.
- Start the bank account and payment gateway early. This is a long pole: unexplained bank delays and Aadhaar-gated gateway onboarding.
- On FEMA, it depends on your situation. If you are bringing capital in at setup, get advice early. If the money is already in the country, it is likely lighter than the warnings suggest.
- Assume the rules will change under you. Build the habit of checking GST and FSSAI rather than trusting a setup. This never stops.
- Keep the reserved work with licensed people, and keep the judgment yourself. The audited accounts, certified filings, FEMA certificates, and legal opinions must come from a chartered accountant, a company secretary, an advocate. The decision about sequence, timing, and what is about to go wrong does not.
What generalises, and what does not
The mechanics, choosing and forming the entity, the FEMA reporting, GST, hiring, getting onto the banking and payment rails, and dealing with regulators as people who deprioritise rather than refuse, are the same for any foreign company building in India. The FSSAI layer and the bakery specifics are ours. The reason this record is worth keeping is the part that crosses sectors: the distance between a company that exists on paper and a company that actually works, which is made of dozens of small, undocumented steps, and which is the real work of entering India.