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  • Writer's pictureGalactic Advisors

Should we set up a Company in India?

Is India a good market to set up a company? Does setting up a Company in India make sense? What advantages do companies in India have?

We answer all these questions in this post.

India is probably one of the fastest growing and developing markets in the world.

Being the world’s 6th largest consumer market is definitely making India an attractive investment destination. Government initiatives implemented over the years have successfully made India a hub of opportunities for foreign as well as domestic Investors and has offered momentum to entrepreneurship.

Foreign direct investment (FDI) guidelines have been revised and liberalized over the years to increase the ease of doing business in the country.

Here's 5 reasons you should set-up a company in India:

1. Corporate Legal Entity:

  • Company enjoys the status of being a separate legal entity and has perpetual succession, that is continued or uninterrupted existence until it is legally dissolved.

  • The owners/ shareholders of the company have limited liability, which means There is a Limited risk to personal assets of the owners in a Private Limited Company.

  • Shareholders enjoy the flexibility of Easy transfer of shares. The shares owned can be very easily transferred via sale/ inheritance/ gift to other individuals or corporates

2. Attract talent:

  • India is brimming with talented people. Whether it is in the field of software, engineering, blockchain, or any other field.

  • Being a corporate entity helps you find the right talent for your business and offer them various non cash benefits like sweat equity shares, ESOPs, convertible notes etc that do not burden your pockets with the increased cash outflow in the initial year of operations and helps you retain the employees. You just don't employ people, you build your team!

3. The LOWEST Tax Rates

  • Companies enjoy the most favourable tax rates not only amongst the different structures in India but also is the lowest in the world.

  • The tax rates are as low as 15% for manufacturing companies and 22% for other than manufacturing companies

  • Also the dividend distribution tax has been abolished making it the most lucrative of all forms of corporate entities as there is no additional tax on payouts of profits

4. Recognition as Startup

  • If your business is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation then you can easily apply for the recognition as a start up. the application for registration as a startup needs to be made within seven years from the date of its incorporation/registration.

  • However, in the case of start-ups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/registration.

  • Eligible startups enjoy the Income Tax exemption for a period of 3 consecutive years and allows your company to demand tax free premium for your company at a value more than the Fair Market Value

5. Easy accessibility to Funding requirements

  • India is a burgeoning VC market. While a lot of startups prefer to set-up shop in Singapore or the US, ease of doing business changes alongwith access to funding have made it easier for Companies to set-up shop in India.

  • Startups are getting access to seed funding, business incubators and accelerator programmes, venture capital funding and access to some of the brightest minds in India as well as the world.

What are you waiting for?

Set up your Company in India with Galactic Advisors!


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