Setting up business in india

Setting up business in india
  • Government of India has permitted foreign investment in almost all sectors with a few exceptions, such as atomic energy & lottery business
  • In the permitted sectors, subject to sectoral caps, FDI may be via 2 routes:
    • Automatic route or
    • Government route (where prior approval of Government of India is required)
  • Equity inflow of and below USD 770 million – Approval from Sectoral department in consultation with Department of Industrial Policy & Promotion (DIPP)
  • Equity inflow of more than USD 770 million - Approval from Cabinet Committee on Economic Affairs
  • Foreign Investors can commence business in India as:
  • 1. An Indian Company:
    • Joint Venture as (i) Private Limited or (ii) Public Limited Company
    • Wholly owned subsidiary permissible in sectors where 100% FDI is permitted
  • 2. A Foreign Company:
    • Liaison Office to represent the parent company in India
    • Branch Office activities such as Export-Import of goods; research, consultancy etc.
    • Project Office activities as per contract to execute project
  • 3. Limited Liability Partnership:
    • Subject to provisions of LLP Act, 2008
    • FDI permitted under the automatic route in LLPs operating in sectors/activities where 100% FDI is allowed and there are no FDI-linked performance conditions
  • 1. Availability of Land:
    • Land in India is a State subject
    • To set up a unit, Investors should get in touch with the respective State Industrial Corporations (IDCs) with business plans and desired land size
    • Applications are reviewed and processed based on merit
  • 2. Types of Land Allocation:
    • Special Economic Zones, Software Technology Parks, Sector-specific Clusters, Export Oriented Unit
    • National Investment and Manufacturing Zones (NIMZs)
    • Private Land - as per FDI policy and State-specific regulations/Conversion from agricultural to non-agricultural land
    • Industrial Parks/ Zones/ Areas – Country/Industry-specific or Multi product
  • For further queries, Connect with Invest India:
    The national level investment promotion & facilitation agency, provides facilitation services for obtaining information on land, arranging location visits for investors and connecting them to state IDC’s/SEZ/NIMZ’s etc. (
  • Investing in India
  • 1. Registering with Registrar of Companies, India (Udyog Aadhar Memorandum / Industrial Entrepreneurship Memorandum/Industrial Licensing) – Single electronic form SPICe (Simplified Performa for Incorporating a Company electronically) has been recently introduced for registering private limited companies. The form provides five services in one e-Form – Director Identification Number, Name Reservation, Incorporation, PAN, TAN.
  • 2. Licenses and Permits:
    • Land: Application to respective State Infrastructure Corporation/ DIC/ SIDC/ SSIDC
    • Environment: Application to the Secretary, Ministry of Environment and Forests, New Delhi (Check Guidelines here)
    • Consent to Establish and Consent to Operate from individual Pollution Control Boards
    • Factory plan approval – Application to local bodies/Chief Inspector of factories
    • Power: Application to State Electricity Distribution Company for sanction of power supply for LT/ HT or Extra High Tension connection as applicable
    • Water: Application to SIDC /SIPB or Central Ground Water Commission depending on source
    • Fire: Provisional Fire Safety Approval from State Fire and Safety department; final approval by local State authority
    • Boiler NOC
    • Tax: VAT/ Service Tax/Professional Tax/Central Excise registration
    • Labour Compliances

* Source: Make In India website