Summary
The United Kingdom and India enjoy long-standing business legacy and deep-rooted diplomatic and economic ties with a strong existing robust bilateral investment relationship that is all set to further flourish during the post Brexit era and boost up UK’s investment for many new India company incorporation.
How is UK India Business Relationship?
Several facts and figures available from the UK India Business Council demonstrate the strength of the relationship and the strong business ecosystem the private sector companies have built-in India. From 2000 to 2016, the UK invested approximately $24 billion in India and increased its investment by almost 8 per cent. between 2015 and 2016. The UK also ranked as the largest of all foreign investors into India.
The operating environments in both countries are congenial to mutual investment and business relationships. An ongoing focus on ease of doing business is expected to give huge dividends.
A Bilateral Investment Treaty providing, protecting and promoting FDI flows would be the harbinger towards a long-term UK-India trade and investment relationship where lots of future scopes exist that can mutually benefit the two countries and enable the potential of both the economies to be realised in the fullest extent. It is also noteworthy that both governments are striving hard to push the pace of their country’s economic development.
The long legacy and historical ties have put India as one of the preferred business destinations for many UK companies, and the UK Government is firmly committed to promoting its existing investment relationship with India, world’s largest democracy and marketplace with great economic powers.
There has been a sharp increase in the number of UK companies entering India since 2000 and the number of new business incorporations over the last two decades greatly outnumbered those that took place in the entire 20th century.
Why an UK Investor Should Register and Incorporate a Company in India?
Following are some key reasons prompting the UK investors for a business set up in India
1. Improved Ranking in Global Competitive Index
2. Improvement in Ease of Doing Business Index
3. Make in India and Swachh Bharat, Clean India Campaigns and Digital India Initiative
4. Improvement in Online Application System for starting a business
5. Betterment in Credit Access
6. More Transparent Payment of Taxes
7. Introduction of GST for a more uniform tax system
8. Improved Legal System
9. Greater Political Stability
10. An young and talented workforce
What Should be the Market Entry Strategy in India?
A private limited company formation is the commonest, easiest and fastest type of Indian market entry strategy for foreign nationals and foreign companies with 100 per cent foreign direct investment into a private limited company or limited company under the automatic route where no Central Government permission is needed. Thus incorporation of a private limited company as a wholly-owned subsidiary of a foreign company or joint venture is the cheapest entry strategy for foreign companies and foreign nationals into India.
A private limited company provides limited liability protection to its shareholders and In the event of any unforeseen losses giving rise to statutory or legal liabilities, the shareholders of the company are not held responsible. Private limited companies can raise equity capital from prospective persons or entities interested in becoming a shareholder. Companies can also raise money from angel venture capital firms, private equity firms, hedge funds and arch investors. Debt financing from banks, NBFCs and other financial institutions are also possible.
How do UK Investors Register and Incorporate a Company in India?
The registration and incorporation of a private limited company can be done in less than two weeks subject to the availability of the following documents.
- PAN Card
- Residential Proof
- Authorization letter from the Landlord of registered office space
- Address Proof
- Registered Office Proof
- Proof of any utility service like telephone, gas, electricity, etc.
The procedural steps on how to register private limited company in India are documented in details online and include the following
Step 1. Submission of Application for digital signatures to eMudhra
Step 2. Submission of Name Approval Request to MCA
Step 3. Preparation and collection of incorporation documents based on the MCA approved name
Step 4. The signing of incorporation documents by all Directors & Shareholders
Step 5: Submission of incorporation documents to MCA for approval
Step 6. Incorporation of the company
Step 7. Issuance of incorporation certificate & PAN
The Fine Print
The Indian government is putting all-round efforts to protect and promote FDI inflows and promising to secure a long-term UK-India trade and investment relationship and help close existing gaps and enable the full potential of both the economies to come to a success.
The UK is constantly seeking to build strong relationships with India after Brexit by realizing the enormous business opportunities due to the recent announcement of India government’s manifesto proposing to spend more than £1 trillion on infrastructure and nearly £10 billion for farming with continued policy reforms. The results should be positive for companies in housing, transport, construction, property, agriculture and financial investment sectors.
