What legal points should an India-based prop firm founder consider?
Quick answer
Consider FEMA and RBI rules on forex trading by residents, which customers you will serve, where the operating company sits, how foreign payments reach India, GST on services, income tax, and marketing rules. The RBI's Alert List and its warnings about unauthorised forex platforms are a key reference.
Detailed answer
General information, not legal, tax or regulatory advice. Rules differ by country and change over time; confirm your position with a qualified professional before acting on it.
A checklist to discuss with your advisers:
- FEMA and RBI: residents may trade forex only through authorised persons and permitted platforms. The RBI's Alert List names entities that are not authorised.
- Customer base: whether you will exclude Indian residents from forex evaluations.
- Entity: Indian private limited company, an overseas company, or both.
- Foreign receipts: how card or crypto payments from overseas customers are received and reported.
- GST: treatment of services sold to overseas customers.
- Income tax for the company and the founders.
- Advertising: avoid earnings claims and influencer promotions that could be read as promoting unauthorised forex trading.
This is general information, not legal advice. Rules change, so check the RBI's current guidance and use a lawyer and chartered accountant who know the sector.
Where to check
Read the RBI's press releases and Alert List directly on the RBI website, and ask your adviser about any recent changes.
PropExecutor team · Updated
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