Want to start a company in India?
One can set up a business in the form of Proprietary concern, Partnership firm, Limited Liability Partnership or Private Limited Company. The form of business to choose depends on the requirement of the entrepreneur. Indian entrepreneurs have a reasonable understanding of the advantages and disadvantages of each of the forms and it is the foreign companies who have to get a clarity on this aspect.
A foreign company wanting to start their activity in India can choose either
- (a) a subsidiary company (Private Limited Company) or
- (b) a branch or liaison office.
The important aspects to be considered are –
- Taxation
- Repatriation of profits
- Ease of doing business
Other points which may be of help are -
Local Director / Partner – One of the challenges all foreign companies face while setting up a company in India is to identify a local director / partner. As per the Companies Act, 2013, it is mandatory to have a local resident Director in every private company. So, many foreign companies will appoint a senior employee of the company as the Director of the company.
Physical Presence – There is no requirement for the shareholders to be physically present for setting up a company. The documents can be sent through courier after apostalization or attestation by Indian embassy.
Foreign Direct Investment (FDI) – Another important aspect to be checked before making an investment is the FDI policy. Today, in India, FDI policy is liberalized and most of the sectors / industries can get foreign equity participation without the specific approval of Reserve Bank of India/ Government. However, there is still a list of activities which are restricted for foreign investments. For example, Real Estate investments are not completely liberalized. It is advisable to seek pre-investment consultation.