How Foreign Companies can enter India? If you are one of those business owners looking to establish a master franchise of a foreign brand in India, but unsure about which foreign companies seeking India entry, you can stop searching right away.
Global brands seeking India entry strategy or recruitment of India master franchise. So, they could use the extensive work that we have done on the ground in India over the last two decades.
100’s of clients have benefited from our 10-step India entry program and we would like to propose our proprietary 10-step plan to ease your expansion into India. Also, companies seeking Indian entry need help with the recruitment of the right master franchise candidates.
But, why are foreign companies interested in the Indian economy?
The availability of cheap labour is the key factor for foreign businesses to establish factories in India. Moreover, there are further ways to cut costs. Lower working conditions also entail fewer safety precautions, saving these businesses a sizable sum of money.
Main Advantages for Foreign Companies Seeking Entry in India
- 100% of foreign direct investment is through wholly own subsidiaries under the FDI policy.
- Strategic alliances with Indian partner organisations, such as joint ventures with Indian partners.
- A new type of business structure in India is the limited liability partnership (LLP), which combines the advantages of a corporation with the advantages of organisational flexibility associated with a partnership.
- Highly-rated human capital base; skilled workforce.
- Growth Potential: The second-fastest growing major economy and the largest democracy in the world.
- A sound legal system has an effective legal and judicial system and better law enforcement.
- Professionalism and an openness to learning are hallmarks of good work ethics.
- Political stability is essential for attracting foreign investment.
- Trade network with many trading partners, supported by regional and bilateral free trade agreements, serves to leverage the investor’s involvement.
- Competitive Tax System: The introduction of the Direct Taxes Code and the Goods and Service Tax, a single tax for the entire country, significantly transformed the competitive tax system and extensive network of tax treaties.
What are the options for Foreign Companies seeking entry in India?
The following options are available to a foreign business looking to establish operations in India:
- As a business entity,
- Contact Office
- Division Office
- Joint enterprise
- 100% owned subsidiary companies
- is a branch of a foreign organisation in any way
Business Related Legislations to be followed in India
- Company Act 2013: This law controls the formation, administration, reorganisation, and dissolution of businesses.
- The Competition Act: controls mergers (merger control) and anti-competitive conduct.
- Income Tax Act: shows how dividends, capital gains, mergers, demergers, and sluggish sales are taxable.
- Indian Contracts Act: This law essentially lays forth the fundamental guidelines for the creation and enforcement of contracts.
- Foreign Exchange Management Act 1999: It controls the movement of foreign currency and investment into and out of India, as well as sector-specific needs.
- Securities & Exchange Board of India [SEBI Act]: It has continually worked to establish market laws that are in keeping with the most effective market techniques. It has extensive authority to penalise market players for violations.
- Securities Contracts Regulation Act, 1956 [SCRA]: It controls the Listing Agreement with Stock Markets as well as the listing and trading of securities on Indian stock exchanges.
How Foreign Brands can start business in India?
India is one of the economies in the world that is expanding the fastest, and it has a sizable market with more than 1.2 billion people. Opportunities in India have drawn significant amounts of foreign direct investment into the nation, and as more foreign companies establish operations in India, the quantity of FDI inflow keeps rising year.
Requirements for Foreign Companies to establish a business in India
A minimum of two people and an Indian address are all that is for establishing a business in India. In India, a private limited company must have a minimum of two shareholders and two directors (can be persons or corporate entities).
Additionally, one of the directors of the company is an Indian citizen and an Indian resident. Thus, according to India’s incorporation regulations, any person who has lived in India for over 186 days is considered a resident.
Establishing a company with three directors—two foreign nationals from the parent company and one local Indian citizen—is the preferred legal entity structure for foreign businesses.
Foreign individuals or entities can own 100% of the shares of the Indian Company. This is because there is no minimum shareholding requirement with the Indian Director.
The Company shall have its registered office at a location in India. The city in which the company will establish its registered office address will also decide the applicable legal jurisdiction for the business.
How Sparkleminds proposes to assist entrepreneurs seeking Master Franchise Opportunities
- I – Initial visit to client HQ
- II – Pre-entry research & market study
- III – Defining the entire business strategy & package
- IV – Pre-sale documentation and registrations of trademarks and IP rights
- V – Marketing the master franchise opportunity in the desired territory using our databases, network contacts and our understanding of the local marketing tools that would be effective to get the best franchisees out of each of the desired regions.
- VI – Discovery days across 5 different cities in different regions of the country
- VII – Finalizing the master/regional franchisees
- VIII – RBI Approval and other statutory approvals at this stage
- IX – Overseeing the start of operations by the franchisees
- X – Then next is recruiting unit franchisees with proper market research and the right filtering of the profile.
To Conclude, About Companies Seeking India Entry
To sum up, Foreign Companies Seeking entry into India have several issues and challenges. Therefore, we help you in overcoming all these obstacles with ease. Our franchise lawyers and experts will guide all aspects of expanding your business in India.
Hence, be assured that we have all the answers that you need to be able to operate in a very challenging market like India.
In addition, we work as a single agency that could fulfil all your requirements and get your foundation in place before you got started.