An Introduction to Doing Business in India 2019
Published: October 2018An Introduction to Doing Business in India 2019 will provide readers with an overview of the fundamentals of investing and conducting business in India. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, tax, accounting, and audit regime, annual compliance, human resources, payroll, and social insurance obligations in this dynamic market.
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No. of Pages: 82 pages
Foreign direct investment (FDI) in India increased to US$61.96 billion in 2017-18 as per the Department of Industrial Promotion & Policy (DIPP), up slightly from US$60 billion in the previous year. As the government pushes toward the ease of doing business and implementing tax and regulatory reforms, India is perfectly positioned to compete with the world’s premier investment locations.
Among emerging markets, India offer investors a unique combination of advantages. Its skilled and low-cost labor force is one of the largest in the world and it has a high level of English fluency relative to other countries in Asia. Economic reforms implemented in the past four years include the roll-out of the goods and services tax (GST), establishing bankruptcy regulations, sector-specific reforms, infrastructural improvements, increasing FDI caps, and the simplification of company registration procedures.
This publication, designed to introduce the fundamentals of investing in India, has been created using the most up-to-date information at the time. It was compiled by Dezan Shira & Associates, a specialist foreign direct investment practice that provides corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
Preface 04
Part 1 | Establishing and Running a Business 09
Investment options in India 10
Liaison office 10
Branch office 12
Project office 14
Setting up a wholly foreign-owned business in India 16
Establishing a wholly owned subsidiary 16
Tax liability for companies 17
Navigating FDI caps and restrictions 22
FDI routes and forms 22
Changes to FDI caps and approval routes 23
Investing in Indian companies 26
Part 2 | Tax and Accounting in India 27
Indirect tax in India 28
Goods and services tax (GST) 28
Impact of GST on imports and exports 39
Strategies to reduce tax burden in India 40
India’s Audit Process 42
An overview of India’s audit process 42
Types of audits 44
Audit reporting 47
Convergence with international standards 48
Key considerations to ensure a smooth audit 49
Why audits are important to your business 52
Part 3 | Human Resources and Payroll Considerations 55
Key considerations when hiring staff 56
Visa application 56
Visa registration 58
Hiring staff in India: Common legal issues 60
Payroll and social insurance 63
Withholding tax returns 63
Individual Income Tax 65
Provident Fund scheme 66
Part 4 | Operational Issues 68
Import and export licensing procedures in India 69
Import policy 69
Export policy 72
Types of duties 73
An introduction to sourcing from India 76
India’s sourcing edge 76
Special economic zones 78
Key considerations for sourcing and procurement 81
