BUSINESS SETUP IN INDIA- Various options available for Doing Business in India

BUSINESS SETUP IN INDIA

 

One of the most common queries received by Indian consulting firms from global corporations nowadays is about business setup in India.

Due to globalization, the companies all over the world has expanded its presence in other jurisdiction or territories from where they are either engaged in trading business or export import or providing services globally.

Owing to its huge consumer market, India has also seen quite a surge in foreign company registration in India in recent years.

Just like Indian companies are curious about how to setup business in foreign countries, similarly, foreign companies are also interested in business setup in India and want to know about various options available for setting up business in India.

VARIOUS OPTIONS FOR BUSINESS SETUP IN INDIA

Well, the type of entities for doing business in India depends upon various factors like Nature of business of the Company, Long term vision of the company and purpose of business setup in India.

When foreign companies are not sure about India as a market and just want to do some water testing, it may opt for Liaison Office Registration. Liaison office only acts as channel of communication between parent company and Indian customers.

They cannot do any commercial activities of earn profits in India. They do not have power to negotiate or conclude contracts. It is a kind of representative office in India or its parent company. LO maintain their day to day activities from remittance received from parent company.

When foreign companies are already engaged in trading or manufacturing activities in its Home Country and want to do similar activities in India, it may opt for Branch Office registration. Branch office can do only those activities which are permissible by RBI in India.

BO are taxed at highest tax rate of 40% plus surcharge and education cess, therefore, this option is normally not preferred by foreign company. BO is normally registered by those foreign companies which are into Research and Development.

Other options are subsidiary company registration in India and LLP registration in India. Both these entities are most preferable and highly popular form of entity registration in India. There is no restriction on type of activities to be done under both the entities.

 For registering subsidiary company or LLP, minimum 2 directors and 2 shareholders are required out of which at least 1 Director shall be an Indian Resident.

Also, local office address is required for its registration. Subsidiary company has flexibility that it can use the brand name as well as technical knowhow of its parent company. LLP registration is normally opted by professional firms like Chartered Accountants, Architects, Interior Decorators and Lawyers. Unlike, Branch office, subsidiary companies are taxed at concessional rates of 15% and 25% plus surcharge and education cess.

Therefore, it is quite a tax efficient entity structure. Subsidiary companies or LLPs are registered by foreign companies when they have long term plans of doing business in India.

Some other types of entities for business setup in India are project office for execution of any project received in India and Joint Venture registration.

Thus, there are many options available for business setup in India by foreign entities and depending upon its long term goals and nature of business, one may opt for best business entity for doing business in India.

For any feedback or queries, you may contact EzyBiz India Consulting LLP at www.ezybizindia.in ; E: info@ezybizindia.in M: +919899217778

Location: India

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