Setting up business in india
Setting up business in india
FOREIGN DIRECT INVESTMENT 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
ENTRY OPTIONS
- 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
LOCATION IDENTIFICATION
- 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. (http://www.investindia.gov.in/)
APPROVALS AND CONSTRUCTION - SETTING UP BUSINESS AS AN INDIAN COMPANY
- 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
TAXATION OVERVIEW
* Source: Make In India website