Services

Foreign Investment in India

General Information

Capital	New Delhi
Language	English、Hindi
Area	3,287,000 sq km
Population	1.43 billion
Currency	Indian Rupee
Harbor	New Delhi、Mumbai、Calcutta、Chennai

　　India is a country located on the Indian subcontinent in South Asia. With a land area ranking seventh in the world, it surpassed China in 2023 to become the most populous country globally. Its capital is New Delhi. India currently stands as the world's fifth-largest economy with a GDP of US$ 2.74 trillion. It has a workforce of 950 million people, ranking second in the world.

Major Types of Entity
　　Foreign investors are allowed to freely invest in India. However, investors from China and Pakistan are subject to scrutiny. India has foreign exchange controls, which regulated the outflow of capital and profits, while there are no restrictions on inward remittances.

　　Foreign investors have four options for establishing a presence in India:

1.	Liaison Office: used for networking, exploring market opportunities, and promoting the business activities and is not allowed to engage in any direct profit-making activities.
2.	Branch : is an affiliated unit of a foreign entity that can conduct business activities in India such as export, import, research and consultancy etc., subject to approval by the Reserve Bank of India.
3.	Wholly Owned Subsidiary: a private limited company is the most common types in India. Minimum two shareholders and directors, and one of the directors being an Indian resident and Indian Citizen. Foreign companies can set up wholly-owned subsidiaries by making 100% FDI in India through an automatic route subject to the provisions of the Reserve Bank of India (RBI).
4.	Limited Liability Partnership (LLP): requires two shareholders and directors. However, LLPs have a more limited scope of permitted activities , and the application process for LLPs is generally longer.

Major Taxes
　　In order to encourage foreign investment in manufacturing industry, the Indian government provided a preferential corporate income tax rate(CIT) of 15%.

　　CIT rate in India is subject to 22%, along with an additional 4% surcharge. Individual income tax rates maximum of 30% for incomes exceeding US$ 3,000. India has a Goods and Services Tax (GST) with various rates: 0%, 5%, 12%, 18%, and 28%, which are determined based on the category and price of the product.

Tax	Rate	Scope
CIT	22%	Standard rate
PIT	0%-35%	Tax resident(183-days)
GST	5%-28%①	General goods Selling <US$6 = 5% Selling >US$12 = 18%
Social Insurance	16.75%	Including: Provident Fund, Pension Plan, Insurance Scheme, and National Insurance.
Health and Education Tax	4%	Additional taxes on CIT and PIT
WHT	20%	India currently has DTAA with over 90 countries with Taiwan as an example 12.5%.

①Food and essential commodities have a tax rate is 0%, while luxury items and protected products are subject to an additional tax of 28%.

Employment

　　The working hours in India are 8 hours per day or 48 hours per week. India has approximately 16 national holidays per year.

　　The overall minimum wage in India is US$116 per month, but local governments can set their own minimum wages. For example, in New Delhi, it is US$ 210 per month, and in Mumbai, it is US$ 230.

　　When an enterprise employs more than 10 employees, it is required to insure medical, production, and injury insurance for the employees. The proportion varies according to the employee's salary level, with an average of about 5% and social insurance of about 16.75%.

Land Ownership

　　India prohibits citizens or companies from countries that have land borders with India, such as China and Pakistan, from purchasing land. In addition, the purchase of agricultural land in India is also prohibited. There are no restrictions on the purchase of factory land by commercial and investment enterprises in India.

Foreign Investment in India

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