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How Foreign Nationals Can Start a Company in India

How Foreign Nationals Can Start a Company in India

Are you thinking of expanding your business globally? Well, think no more! India is one of the best countries to take advantage of your entrepreneurial spirit and grow worldwide. India’s economy is booming day by day, without any doubt. Its diverse market offers immense opportunities with a skilled workforce.

Starting a company in a different country may seem challenging, but it’s actually simpler than you think. All you really need to do is hire credible consultants and lawyers. India has a vast market with various benefits, making it a prime region for a new business. The Indian government has launched several schemes to help foreign nationals smoothly step into the market with their excellent business ideas.

The Indian market is full of opportunities because of its cultural richness and flexibility. India’s rank has also improved in the global innovation index. Now is the best time for you to thrive in India. Unlock your potential and start your company in India. JustStart is always here to provide solutions for all your problems with ease and accuracy.

The Indian government has taken measures to promote FDI (Foreign Direct Investment) under the leadership of PM Narendra Modi, resulting in the highest inflow of FDI in recent years.

Types of Companies Foreign Nationals Can Start in India

Here are some prominent business structures through which you can invest in India if you’re a foreign national, NRI, or foreign MNC:

Private Limited Company

If you are interested in starting a full-fledged company, a private limited company is considered the best option in India. It is a very rewarding venture that allows for a vast customer base. Foreign nationals can easily apply for loans or attract investors to scale up the business. The Indian government offers tax breaks and multiple incentives to improve their financial structure. It is also very easy to set up..

Limited Liability Partnership (LLP)

An LLP can be chosen as per your business requirements, but it is not usually preferred because the company does not offer an equity capital structure to investors. At least one of the partners needs to be an Indian resident. An LLP offers flexibility and limited liability to the partners, with limited compliance requirements, making it easier for foreign nationals to manage.

Branch Office

A branch office is a type of facility established in any location other than the main headquarters of a company. They need to get specific approvals from the Reserve Bank of India for business operations in India. It is often set up for business expansion, serving customers in different geographic areas and taking advantage of specific market opportunities. However, every branch office has to follow the same guidelines and policies set by the main office.

Liaison Office

A liaison office is established to create a link between a foreign company and its Indian counterparts. Also known as a representative office, its aim is to align with the Indian government as an extension of the foreign company, but it cannot engage in commercial activities or earn a profit. It is a cost-effective option compared to a full-fledged joint venture and has fewer regulatory requirements.

Wholly Owned Subsidiary

A wholly owned subsidiary is a type of company that has complete control of business operations in India. This type is very popular among MNCs because it allows 100% FDI from foreign nations. The liability of the shareholders is limited to their investments, and profits are delivered to the parent company after settling all applicable taxes. These companies have direct contact with the locals, helping them serve market requirements effectively.

Project Office

As the name suggests, a project office is established for a specific purpose or project. It is a temporary office set up by foreign company to execute a project given by an Indian company. Approval from the Reserve Bank of India is needed to establish this office. The liabilities of the investors are limited to the duration of the project, making it convenient and cost-effective for market experiments.

Joint Venture Company

In a joint venture, a local company in India collaborates with a foreign company to undertake certain projects or assignments in partnership. The liability of the company is shared with partners, and they share capital, technology, and human resources for better business operations. The foreign partner benefits from the local partner’s distribution network and customer base.

Important Documents Required to Register a Company in India

  • Memorandum of Association: Outlines the company’s vision and execution plan.
  • Articles of Association: Mentions all the internal regulations and procedures of the company.
  • Declaration by Directors: Indicates the consent of all the directors.
  • Address Proof: Contains address proof with utility bills or recent bank statements.
  • Identity Proof: Proves your identity and nationality through a passport, driving license, or national identity card.
  • No Objection Certificate: Required if the registered office is rented.
  • Additional Approvals: Depending on your type of business, additional sector-specific approvals might be needed through regulatory bodies.

Foreign nationals need to obtain a digital signature certificate to ensure the authenticity of all the documents signed by them. Directors also need to apply for a director identification number, issued by the Ministry of Corporate Affairs (MCA). After submitting the documents and receiving approval, the company incorporation can be done.

Conclusion

The process of establishing a company in India as a foreign national can be complex, but prior understanding will help you manage it well. Consulting with financial experts in India will provide you with valuable guidance. Feel free to contact JustStart for consulting services.

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    Our Popular Services at Glance

    Private Limited Registration

    8,899
    • No minimum capital requirement
    • Limited Liability
    • Tax Advantages
    • Business Continuity
    • FDI Allowed
    • Builds Credbility
    • Personal Reputation

    LLP Registration

    7,499
    • No minimum capital requirement
    • Legal Recognition
    • Lower Registration Cost
    • No requirement of compulsory Audit
    • Savings from lower compliance burden
    • Taxation relief
    • Easy Transferable Ownership

    OPC Registration

    7,999
    • Separate legal entity
    • Liability of the members is limited
    • OPCs allow the Transferability of shares
    • Savings on compliances
    • It has to mention a nominee while registering the company
    • No minimum paid-up capital required

    Trademark Registration

    6299
    • Builds trust and Goodwill
    • Differentiates Product
    • Protection against infringement
    • Global Trademark Registration
    • Attract Human Resources
    • Exclusive Rights
    • Recognition to product’s Quality