Planning to start business in India

India welcomes foreign nationals and organization to set up their business in India. India is a land of opportunities coupled with various government incentive schemes for start-ups.

It is important to choose an appropriate form of business entity, which would facilitate achieving the desired results. It is the first step towards setting up of any business. A foreign individual or company can set up business operations in India in the form of:

1.       Foreign Company Representation

a.       Liaison office – The office acts as the communication medium only

b.      Branch office – Can do business as an agent of the foreign company

c.       Project Office – Suitable in case of executing a single project

2.       India Corporate Set-up

a.       Wholly owned subsidiary – New Private Limited entity owned fully by Foreign company

b.      Joint Venture – A new private limited with an Indian partner

c.       Limited Liability Partnership – A new corporate entity in the form of partnership with an Indian player

Considering the popular modes, we have listed the main features of the following kind of structures.

 Liaison officeBranch OfficeWholly owned subsidiary
Legal EntityNo separate legal entitySeparate legal entity
Incorporation approvalPrior RBI approvalPost incorporation reporting
Foreign Direct investmentsAs per RBI framework
Commercial activityCan act as a channel of communication onlyCan act as buying/selling agent, can’t do manufacturing (except within SEZ)Can operate complete business activity
Pre-requisitesParent Company should have a profitable track record during immediately preceding three years in the home country and the net worth as per latest audited Balance Sheet should not be less than USD 50,000/- and USD 100,000 for opening a Liaison office and Branch office respectively.No such requirement
Income Tax ratesNot applicable, as no business activity allowedAt the rate of 40%At the rate of 25-30%
Tax on Repatriation of profitsNoneApprox 17-20%
Exit from IndiaFaster and easy in comparison to other structuresEasier than wholly owned subsidiaryComplex in comparison to other structures

One may please select upon these structures which cater to the requirements of the planned India entry.

Why business organizations incorporate a company in Singapore?

Forbes’ Best Countries for Business rankings, Singapore ranks at Rank 9, vis-à-vis India ranks at number 63.

Singapore is considered as world’s second best after New Zealand, when it comes to ease of doing business ranking by World Bank for year 2018. India positions at rank 100.

Singapore is, in fact, is considered the most friendly business environment for promoters. Let’s look at comparative business advantages if one does business in Singapore or India.

Income Tax

At India, the tax highest tax slab is 30% excluding 15% surcharge and other cesses, while at Singapore it is 22%

Tax on dividend

At India, dividend distribution tax is charged at 15%, while there is no dividend distribution tax at Singapore.

Income tax for companies

At India, a flat rate of 25% plus applicable surcharge is charged for small companies and 30% for plus applicable surcharge on bigger ones. In comparison, Singapore charges 17% corporate tax to companies.

Tax exemption for new companies

While there are stringent conditions to be met at India for claiming any tax advantage in initial years, Singapore gives full tax exemption on the first $ 100,000 chargeable income in first 3 years.


In the times of globalization, zero country borders, instant communication, every business wants to expand its wings across the globe. Singapore does offer a very good environment for your global needs.