Setting Up a Business in India: Visa, Legal & Tax Considerations
In the last few years, the Indian business sector has experienced a subsequent growth. Multiple individuals are bringing their businesses into the market to benefit from this growth, some of whom are also foreign nationalities. Entering India with an Indian eVisa for business and setting up a business is extremely common for many foreigners.
However, starting a business isn’t just about applying for a visa. A lot more goes into the whole process. You must start the process only after knowing the basics. This way you get a chance to avoid making any mistakes.
Business Visa Requirements
Well, to set up a business, you will have to first enter the country. This is exactly where you will feel the importance of a travel permit or visa. However, just any visa won’t do the job, and you will have to get a specific visa, which is an Indian eVisa for businesses or a Business eVisa.
Types of visas for business owners & investors
India offers a few different types of visas to foreign nationalities depending on their role in the business. Some of these types are:
Business Visa (B-Visa)
This one is for all the foreign nationalities who are entering the country solely to start a new business. This one stays valid for a year from issuance and allows multiple entries. The applicant cannot stay in the country for more than 180 days during each visit. However, if you wish to stay for more than 180 days, then you will have to get registered with the FRRO/FRO two weeks before the 180-day mark is exceeded.
This visa will help you take part in a few different events, including:
- Attending business meetings, conferences or events.
- Setting up a new branch office or factory.
- For visiting a branch.
- For delivering a lecture as a guest.
- To hire new employees and team members.
- For buying or selling services or goods in India.
- For visiting India as an expert supervising a project.
Employment Visa
Generally, business owners do not apply for this visa, however, there is one scenario under which they might apply for this visa. This visa is for any individual who is coming to India with an aim beyond just setting up a business or investing. Any individual who plans to work in the company as a salaried person and has a predicted remuneration will have to get this visa.
Investor Visa options for long-term stays
Well, if as a foreign business owner, you are planning to stay in the country permanently, then getting just an Indian eVisa for business will not be enough. In that case, you will be required to apply for a Permanent Residency Status through the investment scheme. However, it comes with a few criteria, which are:
- Investors must invest a minimum of INR 10 Crore within 18 months, or they can also invest a total of INR 250 Crore in 36 months under the FDI route.
- Their investment must result in employing at least 20 residents of India in every financial year.
This way, they will be able to get the Permanent Residency Status which comes with multiple entries and stays valid for 10 years. You might also get an extension of an additional 10 years.
Visa application process
Irrespective of which of the above-listed visas you apply for, you will be required to follow a proper application process. This involves a few different steps, which include:
- Visit the online visa portal and check your nationality’s eligibility.
- Find the application form and start filling it out with accurate details related to yourself and your visit purpose.
- Add scanned copies of the necessary documents required for eVisa for India like a valid passport (one that has a minimum of two blank pages and 6 months validity starting from the day you exit the country, see requirements), recent passport-sized photograph (check the requirements), bank statements, invitation letter from an Indian company, business registration documents, certificate of incorporation of India and any other thing that will be required by the authority.
- Pay the fee towards the visa application through your credit or debit card.
After this, you will have to wait for 3 to 7 working days for the application to be processed. Once your application is approved, you will be sent an approval letter to your email ID that you provided on the visa application form. Next, you will have to get a few copies of the letter and bring them with you to the airport. However, if you notice that there is a delay in the process, then you will have to contact the Helpdesk for further assistance.
Legal Requirements for Setting Up a Business in India
Running a business in India requires you to match a few legal requirements which form an important part of this process. Some of these are:
Choosing the right business structure
Not all businesses are of the same kind. So, you will be required to choose the correct business structure before starting your venture. Some of the business structures that you will be required to choose from are:
- Private Limited Company (PLC)
- Limited Liability Partnership (LLP)
- Sole Proprietorship & One-Person Company (OPC)
Other than that, you will also have to specify if this is a Branch Office, Liaison Office, or Subsidiary for foreign companies.
Registration process & approvals
The Government of India has created the Companies Rules, which specify that they will have to be authorised to register. This registration process involves a few steps, and all companies need to get approvals. Some of the things that they will be required to do are:
- Obtaining a Director Identification Number (DIN)
- Apply for a Permanent Account Number (PAN) after entering the country with an Indian eVisa for business
- Register your business with the Ministry of Corporate Affairs (MCA)
- Comply with the regulations set by the Foreign Direct Investment (FDI)
Tax Considerations for Foreign Entrepreneurs
Providing the documents required for eVisa for India is not enough for setting up a business in the country. You must also comply with the taxation regulations your business falls under. Some of the things that involve your understanding are:
Corporate taxes: Understand the corporate tax rates, which, according to the latest update of the regular taxation regime on April 1, 2024, sit at a standard corporate income rate of 30% for domestic companies and 35% for foreign companies and their branch.
GST: Apply for Goods and Services Tax (GST) registration & and comply with it.
FDI Benefits: As a foreigner, you will benefit from the Foreign Direct Investment tax benefits for startups & small businesses, including GST benefits and the 80-IAC tax exemption.
DTAA: The Double Taxation Avoidance Agreements (DTAA) ensure that all foreign investors are taxed only once on their income. Any foreign or non-resident company which operates in India can withhold tax on incomes like dividends, royalties, and interest under the IT Act.
Banking & Financial Considerations
Running a business largely involves financial dealings. From buying property to paying employees, money is an integral part of the whole thing. You need to match some financial considerations for the process. Some of these considerations are:
- Open a bank account for your business in India after getting an Indian eVisa for business
- Comply with the different regulations set by the Foreign Exchange Management Act (FEMA)
- Follow the Repatriation of profits and financial regulations
Business Compliance & Licensing
All business owners are required to get a few permits and licenses during this process. These prove their eligibility and show that they have matched all the rules and regulations related to running a business. Some of the permits that you will need for setting up a business with an Indian eVisa for business are:
- Mandatory business licenses based on industry
- Intellectual Property (IP) protection, like Trademarks & patents
- Work permits & labor law compliance for hiring employees
Ready to set up a business with an Indian eVisa for business?
Setting up a business after applying for an Indian eVisa for business will help you become a part of a growing economy. However, it will also require you to understand the legal and tax considerations related to the process. This way you can guarantee not to face any issues during starting your venture. Other than that, you will have to arrange the necessary documents required for eVisa India and submit them during the application.
However, if you still face some issues after properly following all the necessary steps, then you will be required to contact the Helpdesk for effective assistance.