India is one of the fastest growing economies in the world. However, India’s position in the ‘Doing Business’ annual reports published by the World Bank has historically been low. Things are changing for the better though, and this is the right time to find business registration service India for starting up a business.
The Government's attempts to improve the ease of doing business have yielded good result with the country jumping 12 ranks in the latest ranking compiled by the World Bank. The World Bank report says India is one of the countries that have made the most improvement, capturing the initiative of the government in a separate section, taking note of the fact that the country has cut down days take for company formation in India, and generally simplified the overall process of starting a new business in India.
The Government of India has taken up a series of measures to improve Ease of Doing Business. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient and effective.
The measures taken for ease of company formation India are:-
The Indian Finance Minister Mr Jaitley also said the political opposition is unlikely to obstruct the reform process, including on the direct and indirect tax reforms, and he was hopeful about the Goods and Services Tax (GST) getting through as well which is one of the few reforms that has been held up. He said India's ranking has improved on ease of doing business in the last one year, but more needs to be done on that front and necessary steps are being undertaken.
The Reserve Bank of India, the Indian central bank, will take steps to simplify doing business for start-ups in India and also help create an ecosystem to boost growth of start-ups, Raghuram Rajan, the RBI Governor, said in his recent monetary policy statement.
"In keeping with the Government’s Start-up India initiative, the Reserve Bank will take steps to ease doing business and contribute to an ecosystem that is conducive for growth of start-ups”, Rajan said in his statement.
"These measures will create an enabling framework for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures Later, while answering a question about the steps that the RBI is likely to take to ease business environment for start-ups in India, Rajan said, "start-ups want money; it can take it in different forms, which usually includes complicated contracts, which sometimes are not allowed under FEMA."
"We are supporting the start-up process by making it easy to raise money mostly from abroad, and also make it easier to complete processes, mostly by making it possible online."
The initiatives come in the wake of the recent Start-up India action plan launch event. Prime Minister Narendra Modi has already announced a corpus of USD 1450 million to fund start-ups, a tax holiday and governmental inspection-free regime for three years, and self certification with respect to nine labour and environmental laws for the first three years. As a result, starting and running a business in India has become easier than earlier.
More key reforms under way: Apart from these steps taken there are more reforms in starting a company in India in the pipeline. The government is developing a single application form for new companies and introducing online registration for tax identification numbers.
In the key area of construction permits too, the government has initiated reforms by starting work on setting up a single-window system in Mumbai. Once implemented, this is expected to reduce the beuraucratic burden.
Moreover, online systems for filing and paying taxes are being further improved to simplify tax compliance, the report notes. These are keys improvements that will encourage budding investors to take procedure to register a company in India seriously.
The report highlights two reforms that India has implemented during the past year. It was able to amend the Companies Act in just under six months and made starting a business easier by eliminating the minimum capital requirement and the need to obtain a certificate to commence business operations, saving entrepreneurs an unnecessary procedure and five days’ wait time. In both Delhi and Mumbai the process for getting an electricity connection was made simpler and faster. The utility in Delhi made the process for getting an electricity connection simpler and faster by eliminating the internal writing inspection by the Electrical Inspectorate. At the same time, the utility in Mumbai reduced the procedures and time required to connect to electricity by improving internal work processes
The report also highlights a number of reforms already underway in India which were not fully felt by the majority of businesses by June 1, 2015 but will help India further improve its rank in the coming years. In particular, it notes India’s efforts to streamline the process of obtaining a construction permit in Mumbai, and new systems for e-filing and e-payment of taxes. Ongoing efforts to introduce and enact the Bankruptcy Code, movement on operationalizing commercial benches and courts in Delhi and Mumbai, efforts to introduce automation in judicial processes in courts, further digitization of land records, and integration of registration and mutation processes, and introduction and launch of National Single Window for trade may also help India improve its rank in future.
The focus of the 'ease of doing business policy' is mainly on cutting out the tedious documentation and unnecessary paper work and getting the work done in a shorter time span. It was imperative to take steps to address the concerns and delays, to enable the industry to grow. This was a much needed step to simplify compliance and to make India more investor friendly.
The regulatory landscape is changing. This presents opportunities – to fully utilise the new measures that simplify starting business in India. This also raises the risk – given the continuously evolving regulatory landscape – of not being fully conversant and of missteps that could cost time and money.
EM’s specialisation and long experience in setting up businesses, of company formation etc., particularly for foreign companies, equips itself to help the prospective investors in India realise the opportunities while mitigating risks.