A guide on how to set up your administration in India in the best possible and predictable way.
Austrian or German companies that become active in India with a subsidiary or another form of presence (liaison office, branch office, etc.) must think carefully about how they want to manage this legal entity when setting up. The administrative work includes in particular: Accounting and AccountingAnd the Personnel cost accounting. But also tax planning and processing, reports and payments to the Indian ones tax authorities and paying social security contributions are critical Compliance Tasks. In addition, of course, reporting and reporting must also be carried out within the group itself Controlling be set up for business in India.
Outsourcing vs. setting up your own administrative structures in India
Managing a company in India: outsourcing or setting up
When medium-sized companies decide to enter the Indian market and want or need to create their own structures locally, the focus is almost always on sales activities. At the beginning, the organization in India typically has fewer than five employees who focus specifically on market development.
With such small and focused units, it rarely makes sense to look around yourself Law & Taxation and HR to take care of it and to employ its own Indian staff. Due to the high complexity and constant changes in Indian tax law, we strongly advise our customers not to let the managing director of the Indian company, for example, take care of these issues himself.
Unfortunately, in practice, applied partial knowledge repeatedly provokes major problems and thus necessary subsequent corrections. These are expensive and don't make a company more popular with the Indian authorities... That's why we always recommend this to medium-sized companies, at least at the beginning administrative tasks outsource to a professional service provider in India. Good and internationally experienced tax advisors come into consideration here - including specialized ones Administrative unit of Dr. Wamser + Batra with the Finance & Compliance department can assist you with advice and support.
If your Indian company grows and eventually reaches a certain size, it of course makes sense to (back) bring the standard accounting and administration processes into your own company step by step. This is the only way to ensure your long-term independence in India.
The outsourcing partner for Indian business processes – a catalog of criteria for your decision
When choosing a reliable and transparent management partner in India, please consider the following considerations:
- Do you want to outsource your finance and compliance tasks to an Indian or a German service provider?
- Do you know who ultimately delivers the service in India? Do you know the outsourcing partner's key employees and can you be sure that the work there will not be outsourced to a subcontractor?
- Would you like to have at least one contact person in Germany available to you for urgent questions and complex interpretations? And at the same time you can rely on the quality of the processes in India?
- Use the checklist prepared for you here (see below) to get a complete overview of which administrative services you will need in India in the next 24 months. Which of these do you want to purchase and which can you do yourself without too much effort?
- Based on your personal checklist, get offers from at least three different service providers and meticulously compare the scope of services offered. Make sure that all (!) requested services are included in the offer and don't just look at the price!
- Obtain references who can provide you with information about the expected quality and reasonable prices of the services.
- Make sure in writing that you can terminate the collaboration at any time and do not bind yourself to an individual Indian tax advisor, tax consultant or chartered accountant, either contractually or organizationally or by creating facts.
- Very important: Does your potential partner have a concept of how they will build up specific know-how and India-relevant processes at your company? And: How will it support the development of your independence and independence in the management of your Indian company in the medium term?
Checklist & overall overview of administrative tasks in India
-
Checklist of administrative tasks in India
Organize and summarize documents
- Accounting and auditing
Booking processes - Corporate Compliance / Corporate Law (Filing Annual Accounts, Filing Annual Returns, Filing of other Annual Compliances, Annual General Meeting, Extraordinary General Meetings, Board Meetings etc.)
- Annual Account Draft Report
- Monthly wage and salary evaluation, payments to employees and payment of income tax (Payroll Report, Expense Claim Report)
- Monthly bank report (Account Statement, Bank Reconciliation Report)
- Monthly financial report (Profit & Loss Report, Balance Sheet, Debtor & Creditor Report)
- Monthly tax report, payments to the tax authorities (TDS Payments, Service Tax Payments, VAT Payments, Professional Tax Payments, Excise Duty Payments etc.)
- Quarterly tax reports, additional tax payments or refunds (TDS Returns, Service Tax Returns, VAT Returns, Professional Tax Returns, Excise Duty Returns)
- Invoicing and dunning
- Travel expense reports
- Preparation and support of the annual audit (Organizing Statutory Audit)
You are looking for a service provider who provides the entire service in India Manages, controls and oversees the administration of your local presence temporarily or permanently? Then speak to us Finance & Compliance Department to us.
