Doing Business In India

India offers various opportunities for non-residents, NRIs and foreign companies looking to establish or expand their business presence. The appropriate structure depends on the proposed activities, ownership, investment, sector, tax implications and applicable Indian regulations. Non-residents, NRIs and foreign companies planning to start or expand a business in India need to choose the appropriate business structure and comply with applicable company law, FEMA, RBI, tax and regulatory requirements.

Business Structures

Depending on the business activity, a non-resident may consider:

Private Limited Company
LLP
One Person Company
Branch Office
Liaison Office
Project Office

The suitable structure depends on ownership, investment, liability, business activity and repatriation requirements.

Private Limited Company

A Private Limited Company provides a separate legal identity and limited liability and can support business credibility and funding. Generally, it requires at least 2 directors and 2 shareholders, with at least one director meeting the Indian resident director requirement.

Company Incorporation

Incorporation is generally completed through the MCA and may involve:

DSC and DIN
Name and incorporation application
MOA and AOA
PAN and TAN
Certificate of Incorporation
Bank account opening

For NRIs & Foreign Investors

An NRI or foreign investor should first select the appropriate business model. Foreign documents may require notarisation, apostille or other authentication, depending on the case. Where foreign investment is involved, FEMA and RBI requirements may also apply, including investment route, sector-specific conditions, reporting and repatriation rules.

Tax & Ongoing Compliance

After incorporation, applicable requirements may include:

Income Tax and corporate tax
GST registration and returns
TDS compliance
Accounting and audit
MCA/ROC annual filings
FEMA/RBI reporting
Transfer pricing, where applicable

Choosing the Right Structure

The right structure can affect liability, taxation, funding, foreign investment and repatriation. Therefore, the proposed business activity, ownership and source of funds should be evaluated before setting up the business in India.