Business Development India
The pages below provide key information for the Indian marketplace
Economy in India
The Indian market with its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment. India’s requirements for equipments and services for major sectors such as energy, environmental, healthcare, high-tech, infrastructure, transportation, and defense will exceed tens of billions of dollars in the mid-term as the Indian economy further globalizes and expands. India’s GDP, growing at 6.7% (for 2008-09), makes it one of the fastest growing economies in the world and the second fastest in Asia. India has potential for a sustained growth of 8-10% for the next couple of years. Now is the time for U.S. companies to enter the rising Indian market.
Legal Entities / Ownership in India
A foreigner can own 100% of a subsidiray. The entity types are: liaison office, project office, branch office, joint venture, wholly owned subsidiary (the foreign company owns 100% of the Indian company)
Visa for India
Employment visa (also called work permit)
Tax Structures in IndiaInformation about Tax Environment
Company Registration in India
The Companies Act of 1956 sets down rules for the establishment of both “Public” and “Private” companies. Private companies are formed between 2 to 50 members and it prohibits invitation to public for capital issues. Many provisions of the Companies Act are not applicable on Private Limited companies. Private limited companies are best suited to foreign entities which want to setup their operations in India with their own money or with limited partners in India, and are not planning for a public Issue. Minimum Paid-Up Capital Requirement The minimum paid up capital at the time of incorporation of a Private Limited Company has to be INR 1,00,000 (around US$ 2250). There is no upper limit on amount of the capital. It can be increased any time, by payment of additional stamp duty and registration fee. Procedure of Company Formation Name Approval The first step in company formation is to apply for a name. For this purpose, an application in Form No. 1A needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated. A fee of INR 500 (around US$ 11) has to be paid for the same. After, receipt of application along with the fees, the name is checked for availability, if it is avaiable then it is allotted to you and it remains valid for a period of 6 months. In this time frame, you can complete rest of the formalities of incorporation. Approximate Time Required for name approval : 3 working days Preparation of Memorandum (MOA) and Articles of Association (AOA) The MOA and the AOA are required to be drafted. The MOA states the main and other objects of the proposed company. The AOA contains the rules and procedures for the routine conduct of the proposed company. It also states the authorised share capital of the proposed company and the names of its first directors. A stamp duty of INR 200 (US$ 5) is required to be paid on the MOA while on the AOA it is payable @ 0.15% of the authorised share capital. Approximate Time Required for Preparation of MOA and AOA : 2-3 working days Documents required for Company Formation The following documents are required to be filed with the Registrar of Companies (ROC) for incorporation of the company: Form No. 1 - This is a declaration to be executed on a non-judicial stamp paper of INR 20 by one of the directors of the proposed company or other specified persons such as Chartered Accountants, Advocates, etc. stating that all the requirements of the incorporation have been complied with. Form No. 18 - This is a form to be filed for informing ROC the registered office of the proposed company. Form No. 29 - Consent to act as directors - Applicable only for Public Limited Companies. Form No. 32 - This is a form that states the names of the proposed directors. Memorandum Articles of Association(MOA) and Articles of Association (AOA) Name approval letter in original. Power of Attorney signed by all the subscribers of MOA authorising one of the subscribers or any other person like us to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation. Approximate Time Required for above work : 7-10 working days Certificate of Incorporation After the above documents are filed, the ROC calls on specific date for scrutiny and making the corrections in the MOA and AOA filed. On complying with the same, the certificate of incorporation is granted.
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