With a robust economy and one of the planet’s largest when it comes to purchasing parity, setting up business in India could very well be one of the soundest investment decisions you can make. It doesn’t matter if you’re a foreign national or local. With one of the world’s best-ranked GDPs, more than 1.2 billion population, and a business atmosphere that is generally more relaxed than other global economies, starting a company in India can be a very tempting proposition. And if you think you’re ready to take the plunge into the Indian economy, here are some of the crucial first steps you have to perform to establish a company in the Republic of India.
Identify the most appropriate type of company that you want to set up
Just like in any other major global economy, the very first step in starting a business is identifying what kind of company you would like to setup.
Sole proprietorships are the simplest types since they don’t require very extensive applications, processing, and registrations. They are best reserved for individuals who would like to run their business themselves.
Partnerships can be in the form of Limited Liability Partnerships or Partnerships, with the main difference being the former doesn’t observe shared responsibility for the mistakes or failures in decisions made by one or more of the partners.
Private and public limited companies are exceptional choices if you are looking at an unusually large number of people running the operation, creating a board in the process of administering and enforcing policy decisions.
Foreign entities wanting to start a business in India can also do so by determining which of the above-mentioned types of companies they would want to setup. Alternatively, they can also apply for a Project Office, a Liaison or Representative Office, a Joint Venture Company, a Wholly-Owned Subsidiary, or even a Branch Office.
Secure your company’s Digital Signature Certificate
All economic activities in India are now required to have electronic documents that are duly authenticated. As such, it is important for new companies to obtain their unique Digital Signature Certificate from agencies that are duly authorized by the Indian Ministry of Corporate Affairs.
Take the necessary steps to incorporate your company
Unless your chosen type of company is Sole Proprietorship, you will have to incorporate your company by first securing a Director Identification Number. Once you have obtained your DIN, you can start nominating a name for your business with the Registrar of Companies. The nomination process is a fundamental requirement for company registration to make sure that your company name doesn’t have a duplicate name elsewhere. Other documents related to the identification and legality of your company will also be required. Furthermore, there are fees to be pain before you will be given the Certificate of Incorporation for your company.
Get your company’s PAN and TAN
All businesses in India, whether local or foreign, are required by the Income Tax Department to obtain their individual Permanent Account Number and Tax Account Number. These are necessary for taxation purposes and for facilitating the linking of taxation and economic data related to all financial, business, economic, and investment transactions engaged in by the company. Both PAN and TAN can be easily applied for.
The following links will help:
Don’t forget to register with appropriate labor offices
All companies in India are expected to register with the Employees’ Provident Fund Organization, the Employees’ State Insurance Corporation, and the Office of Inspector, Shops, and Establishment Act, as well as other government entities that are related to employee relations and management.
Starting a company in India is easy. Simply follow these steps and you should be on your way to making good use of India’s global economic standing.