India is a huge and fastest-growing economy with the great potentiality to explore in every aspect and has been setting-up example for the world. India entry or establishing a business in India has gradually made easier for the foreign entrepreneurs by providing advisory, consultancy, hassle-free legal compliances, and guidance. There are various ways for setting up a business in India such as liaison office or joint venture. Expanding business in India necessities understanding of the specific market and the compliances that need to be fulfilled, since it mostly differs from industry to industry. In this article, after comprehensive research, I have outlined the main compliance regulations which companies need to encounter when operating in India. Companies like ASC Group in India is providing foreign companies with comprehensive solution for all kind of legal compliances/complex matters.
Formation and Registration
To Set-up Company in India, you must fulfill the following requirements:
- The company need to be registered with the applicable Registrar of Companies
- The company need to be planned concerning the applicable provisions of the Companies Act 1956;
- The obligatory registration forms have to be filed with the Ministry of Corporate Affairs; and
- The proper director identification number forms require to be completed.
Tax Compliance for doing business in India
Corporate Tax Returns: Companies require to file annual corporate tax returns with the Income Tax Department. A business that upholds domestic transactions and international transactions with associated parties. Companies must file an annual transfer pricing audit.
Excise Duty for Manufacturers: Business involved in the manufacturing and production of goods must conform to the Central Excise Act. This needs companies to pay duties at a detailed rate on the manufactured goods that are removed from their premises.
RBI Compliance: The Reserve Bank of India recently announced the Liabilities and Annual Return of Foreign Assets to account for profits that companies make in connection to foreign direct investment. I
Withholding Tax Returns: Companies that do transactions to businesses outside India for specific services (royalties, technical work, etc.) need to withhold the requisite taxes and also file a consistent withholding tax form on the applicable payments. Companies have to deduct a specific type of withholding tax called the Tax Deducted at Source on payments made to entities in India. Withholding tax deductions for foreign payments should be certified by a Chartered Accountant.
Service Tax: Service provider companies must file biannual tax returns and make monthly payments towards service tax on the service value that they provide.
Other legal compliance for India Entry
- Establishing a private company in India requires at least two shareholders or members.
- Business India entry requires a minimum of two directors required for a private company and three directors for a public company.
- An independent auditor must be chosen to work for minimum one year. They are in charge of the company financial statements and provides their view on the financial statements with an audit report.
- Each company needs to conduct a yearly general meeting (AGM), where the company’s financial information reviewed. An independent auditor must be present at the meeting.
- Management staff or foreign managers should be properly authorized by the board.
- The minutes of (AGM) is to be signed by the board chairman and must be made available for examination by board members.
This is Anil, having an experience about 3 years in digital world and currently associated with Enterslice and I am regularly publishing different types of featured articles about the globe. Enterslice offers business consulting services across the world. For more details you can visit https://www.enterslice.com or call now @9870310368.