Update 2023: Company formation in India

The most important fact in advance: Our work only ends when your company has gained full ability to operate in India. BiWe will accompany you holistically there. 

We have been bringing European food for over 20 yearse Companies to India and We take care of setting up companies there. Over the years we have so far over 200 companies established in the Indian market.

Our wealth of experience expands year after year. Many things have changed, many things are remained the same. Numerous risks and tripping hazards We now know and master ite "from the effeff"New challenges we see it as an opportunity.   

One might think that company formations always proceed in the same way and that the different providers on the market would follow one and the same patternbarwork. The reality is different.  

Already during the founding process Let's develop a vision for yours together lived corporate reality in the coming years. We have a precise knowledge of what your risks but also your opportunities will be in the Indian market. Numerous providers on the market can fill out a formation form correctly. Not everyone is able to incorporate reliable forecasts for the future into the founding process. We count this as our standard.  

Your advantage with our anticipatory perspective is that you are spared the need for costly readjustments later on. For example, when setting up your company, we take into account which product segment you will be active in and therefore adapt the statutes and equity capital accordingly. You can guess what financial consequences it will have and how complicated it will be if you later have to have a change to the articles of association or capital adjustment carried out in India because you have to meet specific legal requirements that you were not aware of when you founded the company and therefore did not take them into account.    

Our very detailed expert knowledge of the actual, legal, tax and cultural realities in India alone makes such a forward-looking approach possible.  

India has pushed forward the consistent digitalization of its government processes over the last decade. Even in the 2010s, the company founding had to be prepared on paper forms and implemented by the authorities in person. This not only led to extremely long processing times, but also enabled corruption. Once you had finally overcome the long queue in front of the official's office, you were next exposed to the risk that your application would end up at the bottom of the processing pile without paying a required "special fee".  

Due to the complete digitalization of the processes, the actual start-up process is now transparent and time-efficient - free of corruption risks. 

The actual founding of a company in India has now become a “standard process” that usually no longer poses any major challenges. 

The real challenges no longer lie in the official registration of a company, but in the related work, such as opening a bank account.  

There are always problems with the exchange of “KYC” information (=Know your Customer Information) due to the often inadequate and missing communication between Indian and foreign commercial banks.  

Or the documents signed in Europe are not accepted by Indian bank employees because the signatures do not match. Europeans are generally not used to reproducing their signature identically over and over again. Then there is a diversion further up or a first name is spelled out once and abbreviated once... From the Indian bank's point of view, the signature is not sufficiently identical, the process is rejected and has to be initiated again.  

Avoid questions with completeness 

In addition, the Indian authorities/tax offices nowadays behave very rigidly and extremely strictly - one could also say: professionally and accurately - when issuing (new) tax registrations.  

As a founder, you should therefore expect frequent questions that you have to answer in great detail.  

Ultimately – and this is very important to us – it depends on the completeness and cleanliness of the applications. If you do your homework well, you will have significantly fewer problems in the process. Anyone who acts hastily and unprofessionally in the wrong place must expect delays.  

Lack of transparency 

In our experience, another challenge is a lack of transparency.  

People or service providers who set up a business for you in India do not tell you in advance what to expect or what things need to be done. Since you are not an expert on starting a business in India, rely on the statements and there may be unpleasant surprises later. For example, when importing into India for the first time, it turns out that a certain regularly recurring customs procedure is triggered, but this was previously kept secret from you. You then have to have rework carried out under time pressure, for which your service provider charges accordingly - work that would have been foreseeable with appropriate experience. 

If you repeatedly experience delays and “imponderables”, this may be an indication that the people or service providers involved in the start-up process are working in a non-transparent manner. 

Unfortunately, without an anticipated approach, the inherently unspectacular act of founding often results in a “rat tail” of problems.  

It is therefore a great advantage for you that we provide you with European project managers. They not only take over the management of the entire project with a “European lens”, but also discuss with you in detail everything that may only arise as a problem a few years after the company was founded. This not only enables quick and, above all, understandable communication and advance checking of your documents, but also avoids (common) errors that can later cost you a lot of time, nerves and money.