Why should foreigners set up their business in India?

A complete guide on “Why should foreigners set up their business in India?”


In the world monetary market, India is the second-largest market in the world. Although India is a growing economy, it has a large influence on the international monetary market. Almost all of the world’s developed international locations prefer to have ties with India or desire to enlarge already current ones. This article will emphasize on “Why should foreigners set-up their business in India?”

What are the types of business entities that can be set up by a foreigner in India?

Business organizations registered abroad (Foreign Companies) can establish a company in India which must be Private Limited Company or a Limited Liability Partnership but for an NRI, the ideal form of a business structure shall be Private Limited Company, Limited Liability Partnership or Only one Person Company.

What are the advantages Of setting up a business in India?

1. A Massive Population

One of the key advantages of beginning a business in India is that it has a broad population and a large market without boundaries with well-established logistics. For decades to come, India’s young population and expanding economic growth is good for global enterprises.

2. A Comprehensive Taxation System 

India has an extensive network of tax treaties, and the Indian tax system has recently been updated by the Direct Taxes Code as well as the Goods and Services Tax (GST) to make it easier for entrepreneurs.

3. Start Up India Movement

Startup India is a flagship activity of the Government of India, intended to make a startup culture and make a strong and inclusive ecosystem for innovation and entrepreneurship in India. Since the launch of the action on 16th January 2016, Startup India has rolled out several programs with the idea of supporting entrepreneurs, and transforming India into a country of job generators rather than job campaigners.

4. Low Operational Costs  

The operational charges in India are low in contrast to different countries. Everything from infrastructure to telephones to the web, labor, and salaries are low-priced and something that any investor can manage to pay to set up a business.

5. Indian Financial System

India has a well-regulated financial system that has access to established markets all over the world and may be financed through a variety of sources restricted to some RBI rules and regulations.

6. Indian Work Ethics and the Working Class

Indians are recognized around the world for their work ethics. The combination of a workaholic mentality, a willingness to learn, and a never say any attitude distinguishes Indians from their South Asian peers. Moreover, the large proportion of the Indian population that is of working age, i.e. 18 to 65, adds extra years to service availability in the Indian market. The teenager has emerged from the closet and is now hunting for chances. Businesses may capitalize on this opportunity by creating jobs and enhancing production.

7. Wide Trade Network

India has a vast network of technical and management institutions of the highest international standards, which are supported by regional and bilateral free trade agreements.

8. Business-friendly Laws

In recent years, the Indian Parliament has approved many significant measures that are advantageous for the majority of industrial sectors. The Goods and Services Tax Bill has improved the efficiency of goods transportation within India. The Direct Taxes Code Bill reforms tax legislation. But the most important (and most controversial) law will be the Land Acquisition Bill. The Companies Bill, which updates India’s corporate law for the twenty-first century and has been passed.  Such business-friendly legislation makes it simple for overseas entrepreneurs to carry out their ambitions to enter India.

Other Benefits available to NRIs and Foreigners for Investing in India  

  • NRI doesn’t need to furnish Return of Income when total income includes only Interest income LTCG or both and/or TDS has already been deducted.
  • NRI who becomes Resident may file a declaration in writing requesting an assessing officer for continuing benefits until transfer or conversion into the money of such assets.
  • The rate of tax for an income of an overseas financial corporation from units purchased in foreign currency or LTCG arising there from shall be 10% only.
  • The income of a resident employee of an Indian company or its subsidiary company engaged in a specified knowledge-based industry or service would be taxed at 10%.
  • Also, royalty of patents developed and registered in India shall be taxable at 10% only.


India has a big market base and fast-developing spending habits of its residents, which makes it one of the favored locations for overseas traders who prefer to boost their businesses. India is a valuable business target for the fintech, services (IT, business outsourcing, software), telecom, and capital markets sectors due to its stable economy, business reforms intended to encourage foreign investment, digital competitiveness, and a sizable consumer market.


If you want to register a startup or a new company in India, you must first register it with the Ministry of Corporate Affairs in India (MCA). It is not necessary to go to the corporate office to register because it maybe done from the comfort of one’s own home. The registration process comprises obtaining a Digital Signature Certificate (DSC), obtaining a Director Identity Number (DIN), and submitting an electronic form.

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