India is a country in South Asia and is the seventh-largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity (PPP). The country is classified as a newly industrialized country, one of the G-20 major economies, a member of BRICS and a developing economy with an average growth rate of approximately 7% over the last two decades. The long-term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has emerged as one of the most attractive destination not only for investment but also for doing business in the recent years. Today, the Indian economy boasts a stable annual growth rate, booming capital markets, and rising foreign exchange reserves. Some of the reasons which make India as a magnate of investments are:
- Large and fast growing middle class & graduation of poor to middle class and hence growing domestic consumption
- Indian Government's constantly evolving investor friendly policy
- Lower cost of production due to lower labour rates
- Availability of skilled manpower
- Abundant natural resources
- Government's emphasis on infrastructure improvement
- India's location, close to markets of South East Asia, Middle East and also Europe
India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies. Private limited companies enjoy tax advantages in addition to limited liability. These companies pay corporation tax on their taxable profits and tend to be exempt from higher personal income tax rates. Forming a company instead of continuing as a sole trader or sole proprietor opens the door to more tax-deductible costs and allowances redeemable against profits.
India has a comprehensive tax treaty network in force with many countries. The treaties generally provide for relief from double taxation on all types of income, limit the taxation of non-resident companies from discriminatory taxation in the country in which they are non-resident.
In order to attract new investments, develop infrastructure and promote export/ industries, India offers also various incentives such as tax holidays, investment allowances, tax credits, rebates and so on.
- Start up and incorporation
- Administration (accounting, tax and legal)