Things Foreign Investors Must Know Before Starting a Factory in India

The factory set up in India for a foreign company requires a lot of formalities to be done. Here are a few important things that can help them to easily set their venture on the land of India.  

An international company or NRI entrepreneur looking for setting up a factory in India must do go through the registration process of the factory. The government of India provides certain benefits based on the classification in the type of entity, Small, Medium, or Micro. When registration is done for a Micro, Small, and Medium Enterprise, then an MSME certificate is issued (Provisional and Permanent).  

MSME certificate helps the company owner to enjoy the various benefits like priority sector lending, differential rates of interest, various exemption under tax laws, get environmental clearances, etc.  

When the factory owner is about to start his or her Micro, Small, and Medium Enterprise, then they should apply for provisional registration.  

Registration process of a factory in India  

The registration process of a factory in India is still considered as tedious task because it involves various legal formalities. Here we will discuss the simplest way of the factory registration process. For factory registration earlier, the form processing was done manually from the back – end teams, but after the beginning of the MCA21 portal, the formalities became simpler and faster. The following are the comprehensive details of the documents needed for registration of a factory in India.  

Mandatory Requisites include:  

  • Authorized capital of Rs 1,00,000.  
  • A minimum of 2 directors with Pan card, Address Proof, Two Photographs
  • Factory or Office address proof.  
  • Director Identification Number (DIN) & DSC (Digital Signature Certificate).  
  • Memorandum of Association & Articles of Association

After completion of the registration process, the factory owner will be given the provisional MSME certificate, and they can start production and later apply for a permanent certificate, which will open more benefit for them.  

Although registration of your Micro, Small and Medium enterprise is not compulsory but doing it will provide them with many government benefits and schemes eligibility.  

Important points to know before starting a business in India  

Foreign investors or company owners have the freedom to set up their business in India in any of the following manners; they just have to retain its status as a foreign company.  

A foreign company can open liaison offices in India to look after its operations, to promote its business interests, to spread awareness of the company’s products, and to explore further opportunities.  

A foreign company can open a project office in India. Opening a project office in India is the best method for companies to build up a business presence in India.  

International companies are allowed to invest in trading companies that are involved majorly in exports. Such companies are treated at par with domestic trading companies in accordance with the trade policy.

Tecnova is one of the best business consulting firms in India that helps various national as well as global businesses to set their business in India. It offers entrepreneurs customized solutions and services to help them grow their business. The main focus of the company is on delivering actionable and timely results to solve their core issues.