India is the South Asian region bordered by China, Nepal, Afghanistan, and Pakistan. The population of the country is estimated at 1.4 billion covering an area of 3.287 million km2. By population, India is the 2nd largest country in the world with an astonishing economy and GDP. The nominal GDP of India ranks 3rd in the world.
Similarly, India has an extremely diversified social fabric that is influenced by many thousands of years of civilizations including the Indus, the Pre-Hindu era, the Mughal Era, the British Era, and many others. Over 19000 languages are spoken in India across its 28 states. The official languages of India are English and Hindi
India has an abundance of oil, gas, minerals, iron, and other natural resources. Over the last decade, several foreign countries have shifted their manufacturing lines to India for reasons such as relaxed tax rates, double-taxation treaties, favorable business policies, political stability, access to resources, etc.
Types of business structures in India
India has a vibrant and supportive business environment. Investors with any level of investment can enter their choice of industry or sector with ease. Similarly, there are several choices available in terms of business formats too; here are a few popular ones.
| S# | Types of business structures | Local name | Min. paid-up capital required |
| 1. | Sole Proprietorship | Aatma Nirbhar Vyavasay | Not applicable |
| 2. | Partnership | Sambandhit Vyapar | Not applicable |
| 3. | Private Limited company (Pvt.Ltd.) | Niji Simit Sahayak Vyapar | US$ 1,300 – 1,500 |
| 4. | Limited Liability Partnership (LLC) | Pratibaddhata Sahayak Vyapar | Not applicable |
| 5. | Public Limited Company (PLC) | Sarvajanik Simit Sahayak Vyapar | US$ 6,000 – 7,000 |
| 6. | One Person Company (OPC) | Eka Vyakti Dvara Sanchalit Simit Sahayak Vyapar | US$ 1300 – 1,500 |
Sole proprietorship
A sole proprietary business is owned and operated by a single person. There is no minimum capital required and no ceiling on how much the owner wishes to invest. All decisions are taken by the owner, who is personally responsible for debts, losses, and any other liabilities arising from the business.
Partnership
A partnership business formed between two or more persons. Partners usually pool investment in any ratio mutually agreed upon and assign the roles of each partner in the business. Profits are distributed as per the agreement or the extent of the share of each individual. Similarly, the losses and liabilities are also borne by the partners in a personal capacity.
Limited Liability Partnership
An LLP is akin to a partnership but differs in the context that it provides legal cover to limited partners against liabilities. One or more partners assigned as ‘limited partners’ are liable for debts and losses only to the extent of their share in the business and nothing beyond that. While the partners assigned otherwise are personally responsible for debts and losses just as in a partnership business.
Limited Liability Company
An LLC is a formal business structure that is recognized as a legal person by the law. The company separates the owners from the business hence providing a defense against any personal liabilities towards debts or losses that may occur during the business.
Additionally, an LLC is a company of choice for medium and small businesses as it allows flexibility to create capital by mixing equity and bank loans while safeguarding the personal interests of the owners.
Public Limited Company
A PLC is a complex business structure that allows the company to create capital through the public. It operates on public money in the shape of offering company shares that are traded on a stock exchange.
One Person Company
An OPC is a new and trending business format in India. Specifically designed for young entrepreneurs and freelancers to allow them to establish a single-ownership company. Thus, allowing the owner to enjoy the benefits of a company while being completely free to take any desired decisions.
Cost of registering a company in India
The costs involved during the registration process pertain to state and local fees, bank charges, legal fees, establishment charges, etc.
Here are some costs that are most likely to be incurred during the process:
| Type of company | Head of account | Approximate cost | Variation dependency |
| Private Limited Company | Fees for name reservationsDigital signatureIncorporationPANTAN | $135 – $270 | Amount of capitalIndustry/sectorLegal requirementslocation |
| Public Limited Company | Fees for name reservationsDigital signatureIncorporationPANTAN | $270 – $500 | Authorized capitalLocation |
| Limited Partnership | Fees for name reservationsDigital signatureIncorporationPANTAN | $200 – $400 | Location |
| One Person Company | Fees for name reservationsDigital signatureIncorporationPANTAN | $135 – $200 | Not applicable |
Cost of doing business in India
India is a majorly self-sustaining country, with an abundance of natural and human resources. Business expenses here are comparatively lower than in the region.
Here are a few salient expenditures that may be budgeted:
Employee salaries and benefits
Employee salaries and benefits can be a significant expense for businesses in India. While labor costs are generally lower than in many other countries, some industries and locations may have higher labor costs. Additionally, businesses may need to provide benefits such as health insurance, retirement plans, and paid time off.
Infrastructure and utilities
Depending on the location, businesses may need to invest in their own infrastructure or pay for reliable services such as electricity, water, and internet connectivity. This can be a significant expense, especially in areas where infrastructure is lacking.
Rent or real estate costs
Real estate costs in India can be high, especially in major cities. Businesses may need to pay high rents or purchase expensive property to establish a presence in desirable locations.
Taxes and regulatory compliance
India has a complex tax system, with multiple layers of taxes and regulations that can be difficult to navigate. Businesses may need to spend time and resources to ensure they are in compliance with tax and regulatory requirements, which can add to the cost of doing business.
Marketing and advertising
Marketing and advertising can be important expenses for businesses looking to establish a presence in India. This can include online advertising, print ads, and other marketing activities.
Technology and equipment
Depending on the industry, businesses may need to invest in technology and equipment to be competitive in India. This can include computers, software, and specialized machinery.
Overall, the expenses of doing business in India can be significant, but there are also opportunities for businesses to find cost savings through efficient operations and innovative strategies.
