India

About the Country

The Republic of India (India or Bhārat) is a seventh-largest country in South Asia and the most populous democracy in the world – bounded by the Indian Ocean on the south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast. India is having common border with Pakistan to the west; China, Nepal, and Bhutan to the northeast; and Myanmar (Burma) and Bangladesh to the east. It consists of 29 states and 7 union territories. The below content will explain you in detail about the requirements for the company formation in India, know more about the process of trademark registration in India and understand India Legal and Compliance requirements.

India

Doing Business Introduction

India has evolved from closed door economy to an open one after the economic reforms in 1991. India now ranks as the 10th Largest economy and 3rd largest in terms of GDP in World. The country has self-sufficient agricultural sector, a diversified industrial base with a stable financial & service sector. The service sector attracts the highest amount of Foreign Direct Investment in the Country.

As per Doing business report of The World Bank –India ranks 130 for 2017 survey. YourGlobalPro professionals can assist its client with any type of company formation, trademark registration and other recurring services for your business in India.

Incorporation - Types of Business Entities

There are different types of entities that can be incorporated in India are as mentioned below:

  • Branch Office: Suitable for foreign companies that are engaged in representation and commerce
  • Representative Office: not engage in income-producing activities with Indian clients only meant for gathering information that relates to the company
  • Project Office: Permission given by RBI for a limited period and for the purposes of setting up a specific project
  • A limited Company: it is a private company (2 – 50 members) or a public company (with a minimum of 7 members)
  • Time Frame for Incorporation of Company in India varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. YourGlobalPro estimates the time required for the process of Company formation in India to be completed is 30-45 working days.

Benefits of Registration of a Company

India is being considered as one of the lucrative market for doing business and the volume of foreign investment in past years is indicator of the same. Below are the advantages of company formation in India:

  • Favorable demography for higher growth as Fifty per cent of its population is below the age of 25 and two-thirds below the age of 35
  • One of the world’s largest consumer markets
  • It is preferred investment destination amongst global investors in sectors like telecommunications, information technology, auto components, chemicals, apparels, pharmaceuticals, and jewelry
  • Cost of the basic amenities required for businesses is lower in India
  • The Urban transformation represents a huge opportunity for international businesses
  • It is hub for certain kinds of startups, including technology, e-commerce, and financial services
  • business-friendly laws make it easy for international players to enter the market

Tax Registration and Filing

In India, fiscal year runs from 1 April to 31 March. The domestic company has been defined for tax purposes as a company incorporated in India. The resident company subject to tax on its worldwide income, unless the income is specifically exempt.

Company Income Tax Rate 30% + 10 % Surcharge + 3% Cess
Capital Gains Tax Rate 20%
Branch Tax Rate 40% + 5% Surcharge + 3% Cess
Dividends 0%
Royalties from Patents, Know-how 10%
Technical Services Fees 10%
Branch Remittance Tax 0%
Tax is Payable in Advance on 15 June, 15 September, 15 December and 15 March Any balance of tax due must be paid on or before the date of filing the return
Tax Returns to be filed by By 30 September By 30 November for companies undertaking international transactions
Liaison office in India To submit a statement in the prescribed form within 60 days after the end of the fiscal year

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. India has double taxation treaties with over 85 countries.

Trademark registration

For trademark registration in India application needs to be made to Trademark Office in India. It takes approximately 24-26 months’ time frame to complete the trade mark registration process. In India, a Trademark Registration in India is valid for 10 years from the application date and can be renewed indefinitely provided renewal fees are paid every three 10 years.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in India for your business. For assistance or advise in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

The New Companies Act, prescribes various compliance about appointment, remuneration removal, retirement of directors, holding board and shareholders’ meetings, passing of resolutions, related party transactions, the maintenance of books of accounts and the preparation and presentation of annual accounts that needs to be complied by the Companies. Below are some of the important points in relation to Company Secretarial Compliance in India:

  • All companies must have registered office and company must also have the name board outside the registered office
  • Only Individuals can be Director in a Company and must have Director Identification Number allotted by the Ministry of Corporate Affairs.
  • The shareholder can be a natural or legal person
  • Must hold a Board Meeting at least once in every 3 months and Annual General Meeting of the shareholder as prescribed under the New Companies Act, 2013
  • The minutes of each meeting held have to be prepared Within 30 days from the meeting and needs to be duly signed and maintained in a minute’s binder and maintained as a permanent document till the life time of the company.
  • the company has to issue share certificates to those who have been allotted shares and the company has to maintain members register and share allotment register
  • The companies are required to do Annual Filings with Registrar of Companies of the Annual return and Annual Accounts.
  • Indian companies are subjected to payment of tax and stamp duty for their business transactions undertaken
  • The Environmental laws also need to be complied to the extent applicable as per the business of the Company.

Accounting Services

In India Companies Act requires periodical filing of the Accounts with the Authority. The Institute of Chartered Accountant of India (ICAI) issues the Accounting standard along with guidance notes (based on International Accounting Standard) thereon to be followed by all the entities carrying out business in India.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your India Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

The Indian Companies Act requires mandatory audits for every company, branches, Banks, financial institutions by an Auditor who is a practicing member of the ICAI.  The First Auditor of the Company may be appointed by the Directors within 30 days of the incorporation or else they need to be appointed by the Members in Extra Ordinary General Meeting. The Companies whose revenue is in excess of INR 10million are required to have their accounts audited under Income Tax Act.

Also, copy of the Audited Financial Statement signed by at least two Directors, including managing Director, if any, ad Statutory Auditor and dated, to be sent 21 days in advance with notice of calling Annual General Meeting to each shareholder and debenture holder within 18 month of Incorporation and 15 month every calendar year and submitted with the Registrar of Companies after Annual General Meeting.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals can provide you auditing services for your business as required by your business.

Banking

The Reserve Bank of India is the Central bank regulatory bodies for licensing and regulating Banking and Insurance Companies. It is very simple process to open Bank Account in India. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in India.

Legal and Compliance

In India, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various India legal and compliance requirement to be followed by incorporated entities:

  • All the companies are required to be registered with the registrar of Companies, in the respective state where the business is to be carried out.
  • In case of foreign Investment necessary compliance are also required to be done with the Reserve Bank of India (RBI)
  • liaison office in India is required to submit a statement in the prescribed form within 60 days after the end of the fiscal year
  • The Government of India has notified computation and disclosure standards (ICDS), effective for the 2015-16 fiscal year and future years and are applicable to taxpayers following the mercantile system of accounting.
  • All the Companies doing business in India are required to comply with laws and the regulation of the Country.
  • Immediately after incorporation the company must apply for Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) with Income Tax Authority.
  • All Companies must submit the balance sheet, profit and loss account, auditor’s report, and annual return every financial year before the due date, with the Registrar of Companies
  • Intimate the concerned Registrar of Companies of Changes in any of the company constitutional Document including appointment, resignation of Directors etc.
  • As per the new companies Act the corporate entities are obligated to undertake certain philanthropic activities
  • The Companies are also required to take registration for service tax, VAT, professional tax, shops, and establishment

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in India:

  • The Employment Visa is intended for a foreign resident who intends to work in India for the same an invitation from the Employer in India need to be provided
  • Foreign residents must register with the Registration Office in India within 15 days of their entry to India in case they want to stay in the country for more than 180 days.
  • PIO card (Persons of Indian Origin card) is issued to foreign residents of Indian Origin which allows entry in India without Visa.
  • Business Visa is granted for a period of 6 months intended for a foreign resident visits India for business purposes
  • The companies can follow their own procedure for recruiting, interviewing, screening and hiring an employee and issuance of offer letter is not mandatory neither there is any standard appointment or contract of employment to be followed.
  • Termination of employment can be voluntary or involuntary.
  • The Central and the State government has prescribed certain duties on the employer for the wellbeing, health and safety of its employee provided in various regulations.
  • IRS requires all taxpayers who hold $10,000 or more in a foreign bank account to file annual Foreign Bank Account Returns (FBARs)

Country Statistics

Capital New Delhi
Largest City Mumbai
Total Area 3,287,263 Sq. Km.
Population 1,326,572,000
Density 392.3 / Sq. Km.
Currency Indian Rupee (u20b9) (INR)
Government Federal Parliamentary Constitutional Republic
Official Language Hindi, English
Religion Hinduism: 79.8% Islam: 14.2% Christianity: 2.3% Sikhism: 1.7% Buddhism: 0.7% Jainism: 0.4% Others: 0.9%
Government Offices Hours Mondays to Fridays: (09.30 u2013 17:30 Hrs)
Business Offices Hours Mondays to Fridays: 09.30 u2013 17:30 Hrs Saturdays until 14:00 Hrs
Banks and Exchange Houses Hours Mondays to Fridays 10:00 u2013 15:00 Hrs Saturdays until 13:00 Hrs

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