Are you planning to start your company in India
Setting up Company in India is often considered to be a big challenge, but we are here to make sure that you have a smooth journey.
Get A Free Consultation
Setting up company in India
B2C Eventures is a multidisciplinary consultancy firm based in New Delhi. It has been rendering variety of services that includes FEMA Compliance, Due Diligence, Cross Border Transaction, IPR Compliance, Compliance pertaining to Private and Public Companies, NBFC Compliance, Taxation Advisory and much more. It has a customer base of approx. 165 clients whose satisfaction has been secured by a strong team of professionals comprising of Legal Attorneys, Chartered Accountants, Company Secretaries, MBAs, Tax Professionals. It has handled more than 267 assignments in last 21 years.
Consequences that may arise on stepping into a business in an unplanned manner:
- You may end up losing all your precious money that has been invested.
- You need to take adequate measures to protect the intellectual property rights from infringement and misappropriation.
- India’s tax structure is complex and the companies who don’t seek specialized help may overpay some taxes and underpay others.
- You may find various difficulties during Land acquisition for establishing legal ownership.
- One of the biggest consequence that the company will face while litigating with cases is that it takes several years to be resolved.
- Companies or Investors have to comply with certain minimum land development requirements.
- You need to deal with various provisions while incorporation in different legislations such as the Companies Act, Securities Contracts (Regulation) Act, Consumer Protection Act, Depositories Act, and Listing Agreement of the Stock Exchanges supplemented by many guidelines, circulars and press notes issued by the Ministry of Finance, Ministry of Company Affairs and SEBI from time to time.
- You may reach to a point wherein you will be required to shut down the business.
- You may be struck under various regulatory Non-Compliance, which could be very fatal in nature.
- You may end up struggling with competition which may raise challenges for you in survival.
- Political scenarios.
- Socio-economic factors.
Frequently Asked Questions
Do you have a ready market for your product/ service or Have you identified that whether your product have enough opportunities?
Solution:A person who is proposing to establish his business in India shall firstly consider the fact that whether there is a legitimate buy/sell offers i.e. whether there are an adequate number of buyers and sellers or not. If a business has a strong base in India, it may involve lessor risk factor.
Ready market shall involve lesser research in the business advancement.
You need to pick proven categories and find your niche. Broad proven categories typically offer greater opportunities than new markets.
For this, one should get the below done:
- Research work/ Market Study in order to know what the Indian customers wants to buy
- Due Diligence
- Understand the business opportunity
How can you enter into new market/ new country?
Entering a new market requires to have a legal recognition at the place where it is proposing to establish its business i.e. in India. This can be achieved by getting itself registered in India Law. It requires understanding that whether there will be enough customers for the product, what are the chances of earning profits and returns in terms of goodwill and one shall study the revenue for your category in the local market, regionally and nationally.
Which State of India you should enter into for establishing the business?
Considering the quantity of customer base, their requirements, reading their mindsets are equally important under this head.
Which entity is best suited for fulfilling your business requirements?
Reply:Out of a Private Company/ Public Company/ Liasion Office/ Project Office which is the best suited entity for your business.
The taxation aspect is covered in point 5 below.There are various restrictions on the activities of the liaison office/ project office:
- No commercial operation can be done by the liaison office (No invoicing).
- The liaison office must maintain a QA22C account with the bank. This is a special account that only allows inflows from abroad.
- The liaison office can neither borrow, nor lend money.
Which entity is best suited via taxation point of view?
A business should be established in a country which is tax efficient in nature.
In a Private / Public Company:
For the Assessment Year 2019-20, the minimum tax rate is 25% and the maximum tax rate is 30% basis the gross turnover, along with surcharge of minimum 7% and maximum 12% basis the total income, Health & Education Cess of 4% of income tax calculated.
Dividend Distribution Tax (DDT):
Companies are required to pay tax @ 20.56% on the dividend distributed to the shareholders in a particular year.
In a Liaison Office/ Project Office:
Every supplier, having aggregate turnover of more than twenty lakh rupees in a financial year is liable to get themselves registered under the GST framework in the state from where he makes a taxable supply of goods or services or both and shall be charged as per the GST laws.
Taking into consideration all the above mentioned pointers and the various restrictions as applicable on the above entities, it is best to enter the country/ a new market through the Private Company route.
If you have any query or need clarification in this regard please Contact