HOW TO SETUP BUSINESS IN INDIA

 BUSINESS  SETUP IN INDIA

 

 

In February 2023, I happened to visit my uncle who was based in Australia, for attending a marriage ceremony in his family. It was a grandeur event attended by almost 200 peoples including 50 odd local Australians.  During the function, one of my uncle’s friends who were an Australian started discussing about Indian economy, industries and what the opportunities for business setup in India are.

I asked him to meet next day after the marriage in a coffee shop, so that I may explain him in detail about the process of business setup in India.

We met in Starbucks and He was accompanied by another Australian guy. He introduced the guy as his friend and partner in his business. Actually, they both were running a business of manufacturing and trading of beers and hard drinks in Australia.

They were very excited to know about the process of foreign company registration in India as they wanted to open an Indian company with same brand as they were using in Australia but they have fair share of doubts in their mind about Indian market.

I advised them in brief that there are many options of setting up business in India like liaison office, branch office, wholly owned subsidiary and limited liability partnerships. I also informed them about various features of each type of entities and their pros and cons.

They informed me that initially, they want to do survey of Indian markets before going for full scale business operations. They were even planning to set up manufacturing unit in India but not initially. I asked them to initially set up a liaison office in India and do water testing and if they have confidence in Indian market, they may start full-fledged operations in India by opting for subsidiary company registration in India.

For liaison office registration in India, it was important that parent company must be profitable for last 3 years and have minimum net worth of USD 50,000 in home country. Also, these are sort of representative offices in India which cannot do any commercial activities in India but only act as channel of communication between parent company and Indian customers. Accordingly, liaison office may conduct the market survey, talk with potential Indian buyers and pass on information to the parent company.

They also asked for the procedure of subsidiary company registration. I informed them that for the same, minimum 2 directors and 2 shareholders are required. Also, at least one director must be an Indian Resident. Local office address will also be required. Further, sufficient capital must be required. Although there is no minimum amount required for company registration but for setting up factory, substantial amount of capital will be required. Also, ROC incorporation fee will depend upon amount of share capital.

I also briefed them about the entire process of subsidiary company registration as well as what types of compliances to be done once company is incorporated in India.

They also share information about various options of doing business in Australia. They were very happy to know that there are so many options of foreign company registration in India.

They informed that they are planning to visit India in the month of April and will finally decide about type of entity for business setup in India. Also, thanked me for providing a brief overview of entire process of business setup in India.

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