How to Start Business in India

NRIs and PIOs (Person of Indian Origin) find it difficult to start business in India and those who start often fail in the venture. Here are some basic steps required by NRIs for this -

1.         If you are a foreign citizen then get an OCI (Overseas Citizenship of India) Card that puts you on par with an Indian as far as business and tax matters are concerned. NRIs (Indian Citizens) do not require this card.

2.         Get a PAN or Permanent Account Number card issued by the income-tax department. Since you plan to go into business in India, you will eventually file your income-tax returns annually.

3.         Choose a Business Partner in India. It makes things much easier for you if you are not planning to stay back in India for doing business. You will identify and select your partners on the basis of their track record, honesty and other personal attributes. The reason of failure for most NRI businesses is choosing a relative or close friend as business partner for emotional reasons. When the business collapses, you have lost not only your money but also a priceless relationship.

4.         Choose a Proper Business Entity. A simple partnership is a viable takeoff for your venture although it has some pitfalls. All it takes is to draw up the agreement between you and your partner(s) and register on a legal, stamp paper and it takes just a few days to complete this simple formality. When your turnover exceeds four million rupees, you need the services of a qualified accountant to audit your accounts and file your tax returns. Limited liability companies take a lot of time to get off the ground and it is very expensive/troublesome to maintain. You can also consider new form of entity – Limited Liability Partnership.

5.         Once you take all these steps, you are - at last! - ready to launch into business. Of course, you have decided the area in which you are going to engage in business. So your firm should become a member of the different business organizations looking after this sector in addition to the local chamber of commerce.

6.         Many NRIs have ventured into exports from India as they help in marketing through their contacts. All export/import business must be registered with the Director General of Foreign Trade. The application form requires a bank account number and a letter from the bank plus various details of partners/directors. The registration takes about two to three weeks.

7.         Getting proper legal/accounting guidance is very important. Check whether your business require other approvals (like environment/pollution).

8.         Control expenses at all levels – if possible start business in your own premises, hire minimum workers, use outsourcing judicially.

9.         Establish & maintain good relationship with government officials, political leaders, chartered accountants, bankers etc.

10.       Visit following websites for Kerala specific information –

http://www.pppinindia.com/states_kerala.asp

http://www.kerala.gov.in/