{"id":100,"date":"2022-10-17T10:36:10","date_gmt":"2022-10-17T10:36:10","guid":{"rendered":"https:\/\/lawyer-india.com\/?p=100"},"modified":"2024-03-04T12:42:59","modified_gmt":"2024-03-04T12:42:59","slug":"open-an-llc-in-india","status":"publish","type":"post","link":"https:\/\/lawyer-india.com\/open-an-llc-in-india\/","title":{"rendered":"Open an LLC in India"},"content":{"rendered":"\n<p>The\u00a0<strong>limited liability company<\/strong>, or the LLC, in India is a business structure that is separate from its founders and where the investors are only liable up to the extent of capital they invest in the business. The company can enter into agreements, can commence legal proceedings and can be sued. In order to\u00a0<strong>open an LLC in India<\/strong> in 2024, investors will need to follow a few steps and this article is a short guideline on these.<\/p>\n\n\n\n<p>Our&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>law firm in India<\/strong><\/a>&nbsp;offers complete company incorporation services for local and foreign investors. We can assist you each step of the way, from drafting the documents to applying for the additional permits needed to run the company.<\/p>\n\n\n\n<p>If you are interested in&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/immigrate-to-india\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>immigration to India<\/strong><\/a>, in addition to company formation, our team can assist you.<\/p>\n\n\n\n<table class=\"redTable\">\n\t<thead>\n\t\t<tr>\n\t\t\t<th>\n\t\t\t\tQuick Facts<\/th>\n\t\t\t<th>\n\t\t\t\t&nbsp;<\/th>\n\t\t<\/tr>\n\t<\/thead>\n\t<tbody>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tMinimum share capital&nbsp;<\/td>\n\t\t\t<td>\n\t\t\t\t<p>\n\t\t\t\t\tNo minimum capital for investors who open an LLC<br>\n\t\t\t\t\tin India&nbsp;<\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\t<p>\n\t\t\t\t\tMinimum number of shareholders&nbsp;<\/p>\n\t\t\t<\/td>\n\t\t\t<td>\n\t\t\t\t2<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tNumber of directors<\/td>\n\t\t\t<td>\n\t\t\t\t2<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tMandatory residency requirements<\/td>\n\t\t\t<td>\n\t\t\t\t<p>\n\t\t\t\t\tYes<\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tLocal director required in India (Yes\/No)<\/td>\n\t\t\t<td>\n\t\t\t\tYes<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tTime frame for the incorporation (approx.)<\/td>\n\t\t\t<td>\n\t\t\t\t<p>\n\t\t\t\t\t14 days<\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tCorporate tax rate in India<\/td>\n\t\t\t<td>\n\t\t\t\tMaximum 34.944% including surcharge<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tDividend tax rate<\/td>\n\t\t\t<td>\n\t\t\t\t10% in general<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tVAT Rate in India<\/td>\n\t\t\t<td>\n\t\t\t\t0%, 5%, 12%, 18%, 28%<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tNumber of double taxation treaties (approx. )<\/td>\n\t\t\t<td>\n\t\t\t\t90 countries<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tAnnual meeting required<\/td>\n\t\t\t<td>\n\t\t\t\tYes<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tAccounting and filing requirements when you open<br>\n\t\t\t\tan LLC in India<\/td>\n\t\t\t<td>\n\t\t\t\tAdvance tax payments are mandatory throughout the year, certain taxpayers are required to have their accounts audited<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tForeign-ownership allowed for those who open an LLC in India<\/td>\n\t\t\t<td>\n\t\t\t\tYes. Can be subject to sector-specific limitations<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tTax exemptions or incentives<\/td>\n\t\t\t<td>\n\t\t\t\tDeductions for companies carrying out scientific research activities, investment incentives for specific activities, for maintaining and operating infrastructure facilities, deductions for certain agricultural extensions, capital expenditure for telecommunications services and others<\/td>\n\t\t<\/tr>\n\t\t<tr>\n\t\t\t<td>\n\t\t\t\tAdditional licenses in India<\/td>\n\t\t\t<td>\n\t\t\t\tYes, industry-specific ones issued by the regulating agency or body in the respective field<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #002e5b;color:#002e5b\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #002e5b;color:#002e5b\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lawyer-india.com\/open-an-llc-in-india\/#steps-for-llc-formation-in-india\" title=\"Steps for LLC formation in India\">Steps for LLC formation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lawyer-india.com\/open-an-llc-in-india\/#llc-changes-and-management\" title=\"LLC changes and management\">LLC changes and management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lawyer-india.com\/open-an-llc-in-india\/#llc-taxation-in-india\" title=\"LLC taxation in India\">LLC taxation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lawyer-india.com\/open-an-llc-in-india\/#about-the-llc-in-india\" title=\"About the LLC in India\">About the LLC in India<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"steps-for-llc-formation-in-india\"><\/span><strong>Steps for LLC formation in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The five steps detailed below are the main ones that need to be followed when\u00a0<strong>opening an LLC in India<\/strong> in 2024:<\/p>\n\n\n\n<ol>\n<li>Obtain the director\u2019s number: this is the identification number of the company director and can be obtained when he is physically present in the country or through a special process when this is not possible.<\/li>\n\n\n\n<li>Obtain the digital signature: the company director must submit a digital signature that will be used on the company\u2019s constitutive documents.<\/li>\n\n\n\n<li>Obtain the name approval: the company name must be unique and an application for approval is submitted with the Registrar of Companies.<\/li>\n\n\n\n<li>Submit the documents: once the company has a bank account and all the documents in order, these are submitted to the Registrar for obtaining the incorporation certificate.<\/li>\n\n\n\n<li>Obtain a tax account number: this is required for income tax deduction purposes and one of our lawyers in India can assist you in submitting the documents with the Income Tax Department.<\/li>\n<\/ol>\n\n\n\n<p>As far as the name of the new LLC is concerned, it is subject to Sections 4(2) and (3) of the Companies Act, 2013, and other rules that indicate, amongst others, that it may not be identical to or resemble too closely anu other name of a company that is already registered under the Act. The company name cannot be undesirable as per the rules of the Central Government and it cannot include certain words or expressions (for example, certain words that are offensive). Moreover, the LLC name cannot be identical or resemble too much the name of an already existent and registered limited liability partnership.<\/p>\n\n\n\n<p>Our team of&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/about-us\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>attorneys in India<\/strong><\/a>&nbsp;can detail these steps and can help you during the registration procedure for an LLC.<\/p>\n\n\n\n<p>Foreign nationals who wish to open a business and are interested in their options for long-term stay in the country can reach out to our team for information about <strong><a href=\"https:\/\/lawyer-india.com\/residency-india\/\" target=\"_blank\" rel=\"noreferrer noopener\">residency in India<\/a><\/strong>. All foreign nationals are subject to certain entry requirements, depending on their nationality and the length of their stay in the country. Our team can answer questions for interested foreign company owners.<\/p>\n\n\n\n<p>Foreign companies can establish their presence in India through a different method, which includes opening the said place of business via a special form submitted to the authorities. The form is signed digitally by the foreign company\u2019s representative and in this case, there is no need to obtain the director\u2019s number (although the authorized representative does need to be registered with the authorities). If you wish to open a branch, rather than an LLC, you can reach out to our specialists.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"1200\" src=\"https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1-480x1200.png\" alt=\"LLC in India\" class=\"wp-image-101\" srcset=\"https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1-480x1200.png 480w, https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1-120x300.png 120w, https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1-768x1920.png 768w, https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1-614x1536.png 614w, https:\/\/lawyer-india.com\/wp-content\/uploads\/2022\/10\/open-an-llc-in-india-1.png 800w\" sizes=\"(max-width: 480px) 100vw, 480px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"llc-changes-and-management\"><\/span><strong>LLC changes and management<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A limited liability company has a managing director, other directors and a secretary. The organizational structure is determined before incorporation as the names of the managing director and those of the directors will be included in the constitutive documents. Investors should note that any post-registration changes brought to the new company\u2019s organizational structure are to be communicated to the Registrar of Companies within 30 days of the event. This also applies to any changes of the company secretary or the company manager.<\/p>\n\n\n\n<p>When buying an existing LLC in India, or simply when the owners of the company wish to change the name, they will need to reserve the new name by following the initial process (make the reservation with the Registrar) and then, once the new name is approved, alter the Articles of Association and the Memorandum to include the new name. Moreover, the new constitutive documents of the company will need to be filed with the Registrar. The change of the name takes full effect once the company owners have also filed the special form that allows the name change to be approved by the Central&nbsp;<a href=\"https:\/\/www.india.gov.in\/\" target=\"_blank\" rel=\"noreferrer noopener\">Government<\/a>.<\/p>\n\n\n\n<p>Our&nbsp;<strong>immigration lawyers in India&nbsp;<\/strong>can give you details if you are interested in obtaining temporary residence if acting as a managing director.<\/p>\n\n\n\n<p>Opening a company in the country does not lead to automatically obtaining <strong><a href=\"https:\/\/lawyer-india.com\/indian-citizenship-by-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">Indian citizenship<\/a><\/strong>, however, a foreign national who has no ties to India or other Indian citizens (by descent or marriage, for example), can apply for citizenship by naturalization after a period of twelve years in most cases. Our team can give you more details if you are already a lawful resident.<\/p>\n\n\n\n<p>We also invite you to watch a short video about the Indian LLC:<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Open an LLC in India\" width=\"840\" height=\"473\" src=\"https:\/\/www.youtube.com\/embed\/_PXYH2wxyHs?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"llc-taxation-in-india\"><\/span><strong>LLC taxation in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An LLC in India is subject to a number of taxes as well as certain annual filing requirements. Taxation is based on residence and a company is considered a resident if it is incorporated in India or has its effective management location in the country (for the respective tax year). Resident companies, such as a newly incorporated LLC, are taxed on their worldwide income. The following tax rates apply:<\/p>\n\n\n\n<ul>\n<li>Corporate income tax: a standard 30% rate applies to domestic companies; a special taxation regime with a rate of 22% is also available, subject to certain conditions; two other rates of 15% and 25% corporate income tax can apply;<\/li>\n\n\n\n<li>Withholding tax: 10% or 7.5% in case of resident companies for dividend payments;<\/li>\n\n\n\n<li>Goods and services tax: 5%, 12%, 18%, 28% and a 0% rate for certain types of goods and services; the most common rate is the 18% one;<\/li>\n\n\n\n<li>Other taxes: 12% social security contributions for the employer; there is no payroll tax, no capital duty and no net wealth or inheritance tax; real property tax is applies on a municipal level.<\/li>\n<\/ul>\n\n\n\n<p>A surcharge applies in addition to the standard rate. This means that the effective tax rate has a value of 34.944% for domestic companies. A different rate, that is also subject to surcharge, applies in case of foreign companies.<\/p>\n\n\n\n<p>Certain resident companies, such as those in the manufacturing sector, which were incorporated after 1 October 2019 can select a different, lower corporate income tax rate of 15% (to which a surcharge can apply). An alternative minimum tax, which can be explained by our team of tax lawyers, applies in case of companies with a tax liability of less than 15% of their book profits.<\/p>\n\n\n\n<p>Companies in India observe a tax year starting on April 1 and ending the following year on 31 March. In most cases, companies submit a final return by the end of October. We advise investors who wish to open a company in India in 2024 reach out to our team of tax experts to find out more about the conditions for filing and payment and the applicable deadlines.<\/p>\n\n\n\n<p>Limited liability companies can benefit from incentives when they activate in certain business sectors. For example, a deduction of 100% is available for payments made to an Indian resident company involved the scientific research activities. Deductions also apply when such a payment is made to an Indian college or university.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"about-the-llc-in-india\"><\/span><strong>About the LLC in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The limited liability company encompasses two distinct types of legal entities: the&nbsp;<strong>private and the public LLC<\/strong>. Their basic characteristics remain unchanged, meaning that the founders are only liable up to a limited amount. However, an important difference is that the public limited company can transfer shares and accepts public deposits. It is more suitable for large businesses, as opposed to the private one. The private company is formed with two shareholders while the public one must have seven&nbsp;shareholders. Certain requirements also apply to the number of directors. These types of companies are incorporated with a minimum paid-up capital.<\/p>\n\n\n\n<p>Our\u00a0<strong>immigration lawyers in India<\/strong>\u00a0can give you complete details about the LLC and can help you understand the legal aspects of owning a business in the country. Investors who wish to\u00a0<a href=\"https:\/\/www.lawyer-india.com\/immigrate-to-india\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>relocate to India<\/strong><\/a>\u00a0can reach out to us for assistance during this process.<\/p>\n\n\n\n<p>Based on statistical data, India had over 1.51 million registered companies as of January 2023, with the majority being companies limited by shares (approximately over 1.5 million entities). Additional trade statistics indicate the following:<\/p>\n\n\n\n<ul>\n<li>The total exports of India in November 2023 amounted to USD 62.58 billion.<\/li>\n\n\n\n<li>This marked a 1.23 percent growth in exports compared to the same month the previous year.<\/li>\n\n\n\n<li>In January 2024, preliminary data revealed a total merchandise exports value of USD 36.92 billion, an increase from USD 35.80 billion in January 2023.<\/li>\n\n\n\n<li>The combined export trade value (merchandise and services) in January 2024 was USD 69.72 billion, up from USD 63.80 billion in January 2023.<\/li>\n<\/ul>\n\n\n\n<p>We are also able to assist you if you have operated a company in the country for some time and need details about the&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/indian-citizenship-by-investment\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Indian citizenship by investment requirements<\/strong><\/a>.<\/p>\n\n\n\n<p>Investors who initially opt for one of the two forms in 2024, either private or public, should know that they can convert the private company into a public one and the public LLC into a private LLC, should this better serve their needs. In order for this to take place, the company owners will need to file a specific form with the Registrar and alter the Articles of Association and the Memorandum.<\/p>\n\n\n\n<p>Investors interested in other matters, such as their options for remaining in the country for medium to long-term purposes, can reach out to our team specializing in <strong><a href=\"https:\/\/lawyer-india.com\/immigrate-to-india\/\" target=\"_blank\" rel=\"noreferrer noopener\">immigration to India<\/a><\/strong>. We can analyze your situation and, based on your purpose of stay, can provide you with details on the documents you will need to submit in order to receive a residence permit.<\/p>\n\n\n\n<p>Our agents can help answer any questions about company formation in India in 2024 and the different requirements for incorporation.\u00a0<a href=\"https:\/\/www.lawyer-india.com\/contact\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Contact our Indian law firm<\/strong><\/a>\u00a0for more information and advice. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The\u00a0limited liability company, or the LLC, in India is a business structure that is separate from its founders and where the investors are only liable up to the extent of capital they invest in the business. The company can enter into agreements, can commence legal proceedings and can be sued. In order to\u00a0open an LLC [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":69,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[11,8,22,21],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Open an LLC in India - 2024 Guide<\/title>\n<meta name=\"description\" content=\"The description of the most commonly used business form in India. 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