Benefits of Setting Up A Company In India
India is the world’s sixth-largest economy, and has an annual average GDP growth rate ranging from 6% to 7% since the start of the 21st century. Setting up a business in India can allow you to take advantage of a large customer base, which is likely to increase your business’ profitability.
Although India is a developing nation, it still has a strong influence on global trading. It is highly populated, with a burgeoning middle class, therefore offering a large market for several industries.
Benefits of Setting Up A Business in India
Business friendly laws, well-crafted foreign policy, and a skilled workforce make India an attractive venue for foreign businesses. Here are the main benefits of setting up a business in India:
India has a population of over 1.3 billion, making it easy to find a market for your products or services. According to the United Nations, India will become the most populous nation of the world by the year 2022.
India’s growing population means that as much as one-fifth of the world’s working age population would soon be living there. This means that your business in India is likely to benefit from a skilled workforce at a relatively low cost.
Several bills facilitating the industrial sector have been approved by the Indian Parliament. The government has taken many steps to encourage foreign investment in various sectors.
Different individual ministries in India have attempted to minimize the obstacles pertaining to foreign investment. For instance, the Goods and Services Tax Bill has made product movement easier across the country.
Moreover, the Occupational Safety, Health, and Working Conditions Code was passed by the Indian Parliament in 2020, replacing a total of 13 existing labor laws on health, safety, and working conditions. This code eliminates the need for companies to go through multiple registration steps to comply with the labor laws.
Employability is one of the prime deciding factors for any business seeking expansion into a new market. Almost 530 billion people under the age of 30 are part of the labor force in India.
Moreover, the part of the population belonging to the working age group (18-59 years) is predicted to climb up to 64 percent by 2021. The majority of the workforce in India is educated as well as skilled, making the employees valuable additions to your business.
Low Operational Costs
Due to the developmental goals set by the government of India, the ease of doing business in India has substantially improved.
The basic facilities required for starting a business in India, such as infrastructure, labor, internet, food and transportation are much more affordable than in developed countries, such as the US and the UK.
Moreover, up to 100 percent of foreign direct investment into a private limited or limited company does not need the Central Government’s intervention any more. This has resulted in a generally lowered cost of doing business in the country.
India has become a hub for technological innovation. Many high-tech businesses in sectors like information technology, telecommunications, textiles, and pharmaceuticals are thriving in the country.
Indian companies heavily focus on incorporating the latest infrastructure and technology. Due to this, there is a high demand and supply of tech-savvy workforce to help your business stay up to date with relevant developments in the digital world.
India has also made measurable advancement when it comes to ecommerce. Amazon has set up software development centers in cities such as Bangalore, Pune, Hyderabad, and Chennai. Making use of an established ecommerce network can lower the fixed costs of your business and help you access a wider customer base.
Setting Up a Business in India – Registration
Registering your business is a mandatory step for all foreign investors interesting in establishing a company in India. Businesses can get registered in accordance with the laws set by the Ministry of Corporate Affairs and regulations under the Companies Act, 2013.
If you want to operate a business in India, you can either form a registered Indian company or create an offshoot of your parent company in the country. Forming an Indian Subsidiary is the easiest way for foreigners to set up a company in India.
The main documents required are:
- Passport size photographs of shareholders and directors
- Valid passport of shareholders and directors
- List of directors and secretaries
- Address proof, such as electricity and telephone bills or the latest bank account statement
- Proof of the registered office address in India in the form of electricity bill or telephone bill
- A No Objection Certificate from the owner of the registered office
- Rent agreement of the registered office
- Complete address of the main business office of the foreign entity
- Constitutional documents such as an apostilled copy of the charter, memorandum, or articles
- Name and address of the authorized representative who shall receive the legal documents of the company
- Information about opening and closing of the business premises at an earlier date
According to Indian law, the minimum requirements for forming an Indian subsidiary are:
- Appointment of at least 2 directors, of which one should be an Indian resident.
- At least 2 shareholders are needed for registering your business. A person can be both a shareholder and a director.
- A physical registered office address.
India is a fast-growing economy with a large population and a skilled workforce. Setting up a business in the country can help you tap a whole new market while taking advantage of low operational costs.
The government actively encourages foreign investment, resulting in minimum obstacles for registering a business in India. For more insights on expanding to different markets around the globe, click here to explore our website.