Doing Business in India

How to start Business in India

To start own business, an entrepreneur have many questions in his mind like which country to choose, which sector to choose, how liberal laws are in a particular country, what will be the steps, etc.

In India, starting business involves various steps as illustrated below;

1.    Choose the right location of the business

Location is a very important decision in starting business. This decision needs to be taken taking into consideration various factors such as nature of business, manufacturing/ trading of goods, nature of goods, labor requirements, raw material availability, Government policies and subsidies.  It’s important to look into the state policies before choosing the location because each state in India is encouraging sector wise and giving subsidies to the entrepreneur.

2.    Choose the right business entity

You can choose from Company, Partnership, Limited Liability Partnership, or Sole Proprietorship. And for a foreign investor, other options are also available like opening a Liaison Office, Representative Office, Project Office, Branch Office, Wholly owned Subsidiary Company, or Joint Venture Company.

3.    Check FDI limits

India’s foreign trade policy has been formulated to regulate FDI in India. A foreign entrepreneur or foreign company proposing to invest in India need to check whether the investment is allowed under automatic route or through prior approval of government

4.     Obtain Income Tax Numbers

After the business entity gets formed, RBI/ FIPB Approval is obtained (only when the investment does not fall under automatic route), the next step is to obtain PAN (Permanent Account Number)and TAN (Tax Deduction and Collection Account Number) from Income Tax department.

There are other specific tax numbers which are required depending upon the nature of business like for a Service Industry, you need to obtain the Service Tax number. And, if you are selling goods, then, you need to obtain VAT (Value Added Tax) number and CST (Central Sales Tax). Excise Number, if you are manufacturing goods.

5.    Filing RBI Compliances

This is post incorporation filing formalities after remittance of capital by foreign investor from overseas to India on issue of shares.

6.    Obtain Business Licenses/ Permits

Also, it is necessary to register business under Shops & Establishment Act. Certain other labor registrations are also necessary for the welfare of employees like registration under Provident Fund Scheme and Employee State Insurance Scheme.

Apart from these licenses, there are some other licenses which are business specific.

Point number 1 to point number 4 is mandatory steps to follow to start business in India.

So, Start your new business now!!