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- Any foreign investors can commence business in India as:
- 1. **Foreign company
- Liaison office – To represent parent company in India
- Branch office – To undertake activities such as export, import of goods, research, consultancy etc.
- Project office – Activities as per contract to execute project
(for carrying out export import, research and project execution operations)
- 2. *Indian Company:
- Joint Venture or Wholly owned subsidiary – Any investor can enter into a JV or Wholly owned subsidiary as either Private Ltd. or Public Ltd company subject to Companies Act 2013
- 3. Limited Liability Partnership:
- LLP (Subject to provisions of LLP Act, 2008)
- FDI permitted under automatic route in LLPs operating in sectors/ activities where 100% FDI is allowed via automatic route and there no FDI linked performance conditions***
(for carrying out manufacturing/ services and other related business operations)
- Types of permitted business establishments in India:
- One-person company
- Private Ltd. company
- Public Ltd. company
- Sole proprietorship
- Partnership firm
- Limited Liability Partnership
- Foreign company
*Incorporate company in India s.t. sectoral caps and requisite approvals
**RBI guidelines regarding establishment of LO/BO/PO: https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10398&Mode=0. As per company law, a resident having PAN to be appointed for receiving notices in India for foreign company
***For detailed definitions, clarifications/ exceptions, please refer to Consolidated FDI Policy document
- 1. Availability of Land:
- Acquisition of land - Application to respective State DI/ State Industrial Development Corporation (SIDC)/ Infrastructure Corporation/ Small Scale Industrial Development Corporation (SSIDC)
- Permission for land use - Applicable in case industry located outside an industrial area Concerned departments:
- State Directorate of Industries (DI)
- Department of Town and Country Planning
- Local authority/ District Collector
- 2. Types of Land Allocation:
- Special Economic Zones, Software Technology Parks, Sector-specific Clusters, Export Oriented Unit
- National Investment and Manufacturing Zones (NIMZs)
- Private Land - as per FDI policy and State-specific regulations/Conversion from agricultural to non-agricultural land
- Industrial Parks/ Zones/ Areas – Country/Industry-specific or Multi product
- For further queries, Connect with Invest India:http://www.investindia.gov.in/contact-us
- Investing in India
- 1. Check availability of name / registered trademark for incorporation of company
- 2. Reserve name of the proposed company through online service RUN on MCA website. Name can also be applied through SPICe+
- 3. Obtain Digital Signature Certificate (DSC) for at-least one proposed Directors of the Company. DIN for proposed Directors can only be applied for through form SPICe+
- 4. Form INC 32 (SPICe+) to be duly filled and submitted to RoC for incorporation of company. PAN and TAN are shall be auto generated based on details filed in the SPICe+ form
- 5. Filing of electronic Memorandum of Association (eMoA - INC 33) & Articles of Association (eAoA- INC 34) in SPICe+ . For foreign subscribers physical MoA and AoA to be executed and attached
- 6. SPICe+ & AGILE upload and fee payment is confirmed by MCA. The application (SPICe+) for incorporation of a company shall be accompanied by a linked e-form INC-35 (AGILE) with effect from 31st March 2019, as notified vide the Companies (Incorporation) Third Amendment Rules, 2019 dated 29th March 2019*
- 7. Central Registration Centre (CRC) verifies/scrutinises all the documents and forms and may suggest few changes to be made in the attachments or form itself. One needs to make necessary changes accordingly
- 8. Obtain certificate of incorporation (CoI). CIN, PAN & TAN numbers are allotted at the time of registration
- 9. A company having share capital is required to file a declaration of receipt of subscription amount and verification of registered office within 180 days of incorporation and prior to commencement of business.
- Notarization & Apostilling / legalization of documents mandatory in case of foreign subscribers / Directors
- Some registrations would be applicable based on state in which company is incorporating and nature of business activity
- *GSTIN, ESIC registration and EPFO registration may be obtained at the time of incorporation by filing AGILE form
- Processes/ Compliances
- Obtain Director Identification Number (DIN)
- Digital Signature Certificate (DSC) for proposed Directors
- Approval for proposed Company/ LLP Name
- Finalization of supporting documents
- Filing of e-forms with CRC
- Verification of documents
- Consent to establish & operate
- Obtain Permanent Account Number (PAN)
- Registration for Tax Account Number (TAN)
- Registration of GST
- Registering / categorization of unit in State
- Approval for State Incentives (Optional)
- IEM/ EM Registration
- MSME Registration
- Acquisition of Land
- Environment, Forest and Wildlife Clearance
- Permission for Land Use
- Pollution Board
- Industrial License
- Consent to Establish
- Factory Layout Plan Approval
- Registration of Boilers
- Building Plan Approval
- Registration under Contract Labour Act 1970
- Registration under BOCW Act
- Power for construction
- Provisional Fire Approval
- Approval for lifts & Escalator
- Consent to operate
- Building Completion certificat
- Final Fire Approval
- Water Connection
- Authorization for hazardous waste
- Professional Tax Registration
- Central Excise Registration
- Shops & Establishment Act
- Employee Registration with ESIC
- Employer Registration with EPFO
- Trademark/ Brand Registration
- Importer Exporter Code (IEC)
- Customs- Special Valuation Branch
- Grant for Bureau of Indian Standards (BIS) License
- Quality Marking Certificate
- 1. Overview
- Over the last few years, the government of India (GoI) and various State (provincial) Governments have undertaken various policy reforms and process simplification towards great predictability, fairness & automation. This has consequently, lead to India’s consistent rise in the World Bank’s Ease of Doing Business (EoDB) rankings over the past few years. India stands on the 63rd position out of 190 countries as per the latest EoDB rankings (2020).
- 2. Key Features of India’s taxation System:
- Taxes in India are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and Local Government.
- A resident company is taxed on its worldwide income. A non-resident company is taxed only on income that is received in India, or that accrues or arises, or is deemed to accrue or arise, in India. Company whether Indian or foreign is liable to taxation, under the Income Tax Act,1961.
- Corporation tax is a tax which is levied on the incomes of registered companies and corporations. Taxes in India are primarily into 2 categories - Direct and Indirect Tax.
- Goods & Services Tax (GST)
Goods and Services Tax (GST) is a unified indirect tax across the country on products and services. It is a comprehensive levy on manufacture, sale and consumption. It is a destination-based consumption tax.
- The GST, dual in nature is levied by both the Centre and State. The Central GST (CGST) is levied on intra state supply of goods and / or service by Central Government and State GST (SGST) is levied by the States.
- Integrated GST (IGST) is levied and administered by the Centre on every inter-state supply of goods and services.
- Import of goods or services is treated as inter-state supplies and is subject to IGST in addition to Basic Custom duty.
- CGST, SGST and IGST is levied at uniform rates, mutually agreed upon by the Centre and the States under the aegis of the GST Council (GSTC).
- All goods and services are covered under GST except alcohol for human consumption and specified petroleum products.
- For further details please visit the Taxation overview page over the Invest India website https://www.investindia.gov.in/taxation
- Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry (MoCI) facilitates and promotes foreign trade in India. The DGFT also implements the Foreign Trade Policy of India (FTP).
- FTP is the prime policy that lays down simple and transparent procedures which are easy to comply with and administer for efficient management of foreign trade in India.
- There are 3 major networks for EXIM- Port, Road and Rail network. About 95% of India’s merchandise trade (by volume) is handled by Port Network.
- India's merchandise exports in September 2020 were USD 27.58 bn, as compared to USD 26.02 bn in September 2019, exhibiting a positive growth of 5.99%. (Source : PIB Release)
- One of the fastest growing economies in the world, India has sustained recent global downturn and also emerged as one of the leading nations in terms of GDP growth rate and FDI inflows.
- Total FDI inflows in the country in the last 20 years (April 2000- June 2020) are $693.3 bn while the total FDI inflows received in the last 5 years (April 2014- September 2019) was $319 bn which amounts to nearly 50% of total FDI inflow in last 20 years. For more information on Flow of Foreign Direct Investments from top 50 countries into India during 2014-20, click here.
- India is likely to grow at consistently higher rates (>7%) and retain its position as one of the fastest growing economies till 2020 (Source: International Monetary Fund)
- In recent years, India has emerged as one of the most attractive destinations not only for investments but also for doing business, evident India jumps 79 positions from 142nd (2014) to 63rd (2019) in 'World Bank's Ease of Doing Business Ranking 2020'. (Source: World Bank) For more information please visit Doing Buiness In India At Invest India
- India has crossed the $70 Bn mark in FY 2019-20 and recorded total FDI inflow of $73.45 Bn. (Source: Department of Promotion of Industry and Internal Trade, Govt. of India)
- Foreign exchange reserves have been at a comfortable level over recent years. Currently, India’s reserves stand at USD 371.279 billion (Source: Reserve Bank of India as on 9th September, 2016)
- India’s fiscal deficit stood at 3.9 % of GDP (USD 81.85 billion) in FY 2015-16 and envisaged to come down to 3.5% of GDP by the end of FY 2016-17 (Source: https://data.gov.in/)
- Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2019-20 is estimated to be INR 146.84 lakh crore. The growth in GDP during 2019-20 is estimated at 5.0 percent as compared to 6.1 percent in 2018-19. (Source: https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1604677)
- The Per Capita Income during 2019-20 is estimated to attain a level of INR 95,706 as compared to INR 92,085 in the year 2018-19, giving a growth of 3.9 percent during 2019-20, as against 4.8 per cent in the previous year.
- With 356 million 10-24 year-olds, India has the world’s largest youth population (Source: UNFPA, The Power of 1.8 billion, 2014)
- The proportion of working age population in India is likely to reach more than 64% by 2021, with a large number of young persons in the 20-35 age group (Source: Economic Survey 2014)
- The average age of 125 billion persons will be 29 years by 2020 (Source: Economic Survey, 2014)
- If India continues its recent growth trend, average household incomes will triple over the next two decades and it will become the world's fifth largest consumer economy by the year 2025 (Source: The Bird of Gold, McKinsey Report)
- India is expected to be the largest supplier of university graduates in the world by 2020 (Source: Morgan Stanley Research)
- India has 712 university level institutions, 36,671 colleges along with 11,445 standalone institutions (Source: Educational Statistics at a Glance 2014, Ministry of Human Resources Development)
- Major FDI policy reforms have been made in a number of sectors, such as defense, construction development, pensions, broadcasting, pharmaceutical and civil aviation
- Foreign investors can invest in India either on their own or as a joint venture, as may be required in a few sectors
- Barring a few reserved sectors, 100% FDI is allowed through the automatic route in several sectors, without the need of government approval, namely Automobile, Food Processing, Construction etc.
- In the Union budget 2016-17, the government has emphasized the need to increase manufacturing as a percentage of GDP
- The Central and State governments have sector specific policies, incentives and subsidies to promote manufacturing
- Increased allocation in the budget to improve infrastructure, which is critical in facilitating future growth
- Sagarmala Project:
The project includes modernization of ports, setting up of coastal economic zones, new major ports and fish harbors
Capital outlay of USD 10 billion (Ministry of Shipping)
- SMART Cities Mission:
Developing 100 smart cities as satellite towns of larger cities and by modernizing existing cities.
Capital outlay of USD 15 billion
In an effort to recast urban landscape and make urban centers more livable and inclusive.
Capital outlay of USD 7.69 billion
- Roads & Highways:
Development of about 7000 km of national highways under Bharatmala Pariyojana.
Capital outlay of USD 12 billion
Dedicated freight corridor for decongesting existing network.
Capital outlay of USD 12.3 billion
- Strategic location:
India’s 7500 km coastline has 12 major ports, over 200 minor parts and is strategically located on world trade routes.
- Some of the emerging and established markets such as Middle-East and South East Asian countries are closely located
- India is surrounded by the Bay of Bengal, the Arabian Sea and the Indian Ocean, an arrangement that facilitates most its overseas trade in all main directions
- World’s largest democracy - India is a Sovereign Socialist Secular Democratic Republic with a Parliamentary form of government, which is federal in structure with unitary features
- India’s robust legal and political systems ensure long-term political stability
- The Indian political system is supported by Executive, Legislative and Judicial branches. Every major branch is independent of one another
- Independent financial institutions for business:
- The Reserve Bank of India (RBI) has played a critical role in maintaining the economic stability in India despite the global economic scenario. The focus on containing inflation and ensuring that interest rate cuts are passed on by banks, is a revolutionary step and structural reform in itself. RBI has been increasing access to foreign exchange reserves, and moderating periods of extreme volatility in the currency through exchange intervention.
- Securities Exchange Board of India (SEBI) has been the regulator of Indian markets since it was granted legal status in 1992. Among other functions, one of SEBI’s prime objectives is ensuring the rights and safety of investors. India achieved a rank of 8 in World Bank’s Ease of Doing Business Ranking – protecting minority investors, highlighting the efficiency of the organization.
- The Competition Commission of India (CCI) is responsible for enforcing The Competition Act across India. Their objective is to play an overarching role as a market regulator across all sectors with focus on anti-competitive behaviour of enterprises that may distort competition.
- India’s jumps 4 positions in innovation rank which made it from 81 to 48 in the world in just 5years.(Source: World Intellectual Property Organization).
- India ranks 1 in the Central & Southern Asia Region (Source: World Intellectual Property Organization).
- India ranks 3rd amongst the Lower Middle-Income Economy Group (Source: World Intellectual Property Organization)
Invest India is the first port of call for potential investors. It is the official investment promotion and facilitation agency of the Government of India, mandated to facilitate investments into India.
Experts provide sector- and state-specific inputs, and handholding support to investors through the entire investment cycle, from pre-investment decision-making to aftercare.
- Market strategy
- Business plan advisory
- Location identification
- Expediting regulatory approvals
- Facilitating meetings with relevant government and corporate officials
- Initiating remedial action on problems faced by investors
Invest India is promoted by the Department for promotion of industry and internal trade (DPIIT), Ministry of Commerce and Industry (Government of India), the State Governments of India and the Federation of Indian Chambers of Commerce & Industry (FICCI).
Invest India has signed Memoranda of Understanding/Framework for Investment Cooperation with select Investment Promotion Agencies in select countries. These are:
- JETRO (Japan),
- Invest in America (USA),
- UK Trade & Invest and UK India Business Council (UK),
- Invitalia (Italy),
- UBIFrance & Invest in France (France),
- KOTRA (South Korea),
- BOI Mauritius (Mauritius),
- Czech Invest (Czech Republic),
- Kaznex Invest (Republic of Kazakhstan),
- Saudi Arabian General Investment Authority (Saudi Arabia).
Invest India is also working closely with Indian missions abroad, foreign missions in India and bilateral/ multilateral agencies.
Invest India functions out of its Headquarters in New Delhi, India. However, for any investment related queries you may get in touch with the commercial representatives of the Indian Embassies/Consulates in your country
No. Invest India is a Section 8, Not-For-Profit organisation. The services provided are completely free of charge. For more specific information, do fill out our investor query form.