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Indian Company Formation


With a population of over 1.5 billion, some immediate benefits of Indian company formation are obvious. And being able to address such a large market is much easier when the foreign investor has a business presence there. India also offers an extremely well-educated, middle-class of over 300 million. This comprises more than 49% of the entire Indian population under the age of 25. Such a youthful educated class gives India a huge advantage over other countries, as it provides a young, intelligent market, which can provide corporate profits for years to come. It also means that the labor pool will be solid for the foreseeable future, and is very well skilled and intelligent.

On the other side of the coin, a vast 70% of the entire population remains un-accessed. To the overseas investor and nonresident business owner, a literally untouched market of 700,000 consumers awaits. The market structure is very liberally inclined, the financial sector in India is very stable, and a firm independent judicial system and successful democracy all provide attractive traits for the foreign business entrepreneur. And right now, India is at a very crucial point in determining their role in the global economic arena. As evidenced by the above statistics, India is on the one hand developing very quickly and has a young and well educated base to lend to the future business operations, and still has plenty of room for growth5.

And on the other hand, the corporate viability of a still growing consumer market that is largely untouched cannot be overlooked. With over 1.5 billion inhabitants and still growing, nonresident investors and those seeking access to a business climate more favorable than their own have very good reason to look to India as a possible destination. As the fifth-largest economy in the world, ranking ahead of the United Kingdom, Russia, France and Italy, India has the third largest Gross Domestic Product on the entire continent of Asia.

With bilateral trade agreements already in place with a number of countries, India is a member in good standing with the World Trade Organization. And since as early as 1991, India has made it a practice to actively seek foreign and nonresident investments. As a destination for foreign capital, India delivers a workforce with a high level of ethics, a country with democratic principles, and a huge market. The key for the foreign investor seeking Indian company formation registration is to get an automatic approval from the Reserve Bank of India, and it can take from 7 to 35 days to incorporate in India as of the most recent World Bank report of 2007. This is due to the 11 step system that most Indian company formation requires. Upon the completion of company formation in India, the new company must then submit annual account reports to the Income Tax Department (ITD). One major tax advantage of Indian company formation concerns double taxation treaties which India has signed with 70 countries, including the US, China, Japan, Australia and others.