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Setting Up Business in India
  • 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
  • Note:

    *Incorporate a company in India s.t. sectoral caps and requisite approvals

    **RBI guidelines regarding the 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 a 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.
  • Note:
    • 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
    • Power
    • 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).
  • Total exports (Services and Goods) is USD 526 bn in 2019-20, surpassed half trillion. (Source)
  • 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 January 2021 were USD 27.24 bn as compared to USD 25.85 bn in January 2020, an increase of 5.37%. (Source)
  • Top 5 commodity groups of export which recorded positive growth during January 2021 are Other Cereals (313.88%), Oil meals (253.06%), Iron Ore (108.66%), Cereal preparations and the miscellaneous processed item(43.62%), and Jute manufacturing including floor covering (27.64%). (Source)
  • Value of non-petroleum and non-gems and jewellery exports in January 2021 was USD 22.40 billion as compared to USD 19.79 billion in January 2020, a positive growth of 13.21%. (Source
Why Invest in India
  • 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.
  • 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)
  • India to remain one of the fastest-growing economies in the world. IMF projects a growth of 8.8% for India in 2021. Source: International Monetary Fund
  • Hon'ble PM Shri Narendra Modi announced a special economic and comprehensive package of more than $270 Bn - equivalent to 10% of India’s GDP, under the Atmanirbhar Bharat Abhiyan (Self-reliant India). Source: Prime Minister's Office, Ministry of Finance
  • During April to November, 2020, total FDI inflow of US$ 58.37 billion has been received. (PIB)
  • The population of India is expected to rise from 121.1 cr to 152.2 cr during 2011-36 an increase of 25.7% in twenty-five years. Source: National Commission on Population, Ministry of Health & Family Welfare
  • India has its largest ever adolescent and youth population. It will continue to have one of the youngest populations in the world till 2030. Source: United Nations Population Fund
  • 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 the third-largest group of scientists and technicians in the world. Source: All India Management Association, The Boston Consulting Group
  • 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
  • Hon'ble Finance Minister Smt Nirmala Sitharaman announced the National Infrastructure Pipeline to provide world-class infrastructure in the country.
  • The NIP will facilitate investments in the infrastructure sector and will be crucial for attaining the target of USD 5 tn economy by FY 2025.
  • Around 7,000 projects were running across different sectors with a costing of INR 100 cr per project.
  • Sectors such as Energy (24%), Roads (18%), Urban (17%) and Railways (12%) amount to around 71% of the projected infrastructure investments in India. Source: Department of Economic Affairs, Ministry of Finance and India Investment Grid
  • Initially, in 2011, only 31% of the population was urbanized as compared to the estimate of 42% by 2030. Source: World Bank
  • 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:
    1. 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.
    2. 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.
    3. 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 jumps 4 positions and ranks 48th in the Global Innovation Index 2020 rankings 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
Investing in India: Who Can Help

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.

The team assists with:
  • 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
WHO ARE THE STAKEHOLDERS OF INVEST INDIA?

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).

DOES INVEST INDIA HAVE ANY FOREIGN ASSOCIATIONS?

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.

DOES INVEST INDIA HAVE ANY INTERNATIONAL OFFICES OR REPRESENTATIVES?

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

DOES INVEST INDIA CHARGE FOR THE SERVICES?

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.