India investment roadmap

Establishing an entity in India requires a thorough understanding of the country’s legal and regulatory framework. While India is an appealing investment destination, its complexities can be daunting without local expertise. A successful venture hinges on understanding the country’s FDI regulations and selecting the right corporate structure, considering ownership, taxation, and liability implications. Adherence to Indian legal acts, including the Income Tax Act, Goods and Services Tax Act, and Custom Laws, is indispensable for operational continuity and avoiding penalty risks.

Key offerings:

• Comprehensive legal framework: Outline domestic laws for entities, detailing their nature, criteria, and compliance requirements.
• Entity structuring: Assess entity-structuring options for optimal tax and regulatory efficiency.
• Tax insights: Evaluate client objectives, offering tax insights and suggesting regulatory-efficient alternatives for India.
• Funding options: Provide various funding options with detailed tax and regulatory implications.

Undertaking a jurisdictional analysis and government policy assessment is critical when setting up an entity in India. The choice of location can impact the ease of doing business, access to infrastructure, availability of skilled talent, proximity to suppliers and markets, and overall operational costs. Businesses must consider connectivity, infrastructure development, industrial clusters, and supportive ecosystems when choosing a location.

Monitoring government policies and initiatives, including the Make in India initiative, that may impact their industry is essential. Proactive engagement with policymakers and industry associations can help businesses stay informed about upcoming regulatory changes, advocate for favourable policies, and address challenges. By following these steps, businesses can achieve success in the Indian market while effectively managing regulatory compliance and operational challenges.

Key offerings:

• Post-investment services: Access ongoing assistance with workforce development, recruitment, and logistics.
• Compliance monitoring: Identify gaps in existing practices to ensure proactive mitigation of financial and reputational risks.
• Market expansion strategies: Develop strategies to expand product reach and grow local market presence.
• Engagement with policymakers: Raise awareness regarding industry-specific policy challenges.

For businesses entering India's growing economy, understanding the legal framework can be daunting. Organisations face regional challenges related to customer and supplier segments, lead times, and logistics optimisation, all while navigating tax considerations that impact the seamless flow of goods and services. A well-structured supply chain model can lead to significant tax benefits, enhancing both financial performance and operational effectiveness.

Key offerings:

• Streamlined supply chain design: Create a manufacturing and distribution network aligned with market strategies.
• Procurement models: Highlight strategic procurement models to optimise financial benefits.
• Tax efficiency opportunities: Identify opportunities within supply chain models to enhance tax efficiencies.
• Digitalisation: Provide near real-time visibility through improved forecasting and planning.

Grant Thornton Bharat offers comprehensive support from planning to establishing India-based entities, focusing on governance and compliance, which is critical during the entity establishment process.

Key offerings:

• Entity structure selection: Advisory on selecting the appropriate entity type (company, liaison office, branch office, etc.).
• Regulatory compliance: Guidance on compliance under various laws, including the Companies Act and FEMA.
• Funding options: Assistance in identifying funding options for Indian entities.
  Customised SOPs: Designing standard operating procedures for regulatory compliance.

Multinational organisations face unique challenges in new overseas markets, particularly regarding taxation and transfer pricing (TP). A robust TP operating model helps determine fair pricing for related-party transactions, ensuring compliance with local regulations.

Key offerings:

• Business model design: Assist in evaluating and designing business models aligned with best practices.
• TP framework implementation: Implement effective TP frameworks to manage tax exposures.
• Inter-company agreements: Structure agreements to minimise costs and controversies.

From a CAPEX growth perspective, organisations face regional challenges regarding customer and supplier market segments, lead and cycle times, and logistics optimisation, all compounded by tax considerations.

Sector-specific incentives linked to incremental production and sales are available under the PLI scheme, offering incentives ranging from 2% to 12% on sales for select products over five to seven years. 

Key offerings:

• Capital investment subsidy: Advise on initial capital investment subsidies based on investment scale.
• Tax structure optimisation: Provide guidance on efficient capital and tax structures.

Navigating India’s evolving customs and global trade landscape is crucial for maximising export incentives and minimising import risks. Our solutions are designed to enhance the transparency of global supply chains.

Key offerings:

• AEO and status holder credentials: Assist in obtaining credentials under the Foreign Trade Policy.
• Valuation advise: Advise on valuation declarations for related-party transactions.

SEZs and STPIs offer fiscal incentives and streamlined operations for export-oriented units.

Key offerings:

• Feasibility studies: Conduct studies for setting up new units in SEZs or STPIs.
• Regulatory support: Prepare and file necessary documentation and represent clients before authorities.

For enterprises aiming to expand in the Indian market, we specialise in mergers and acquisitions as well as fundraising.

Key offerings:

• M&A advisory: Identify acquisition targets and investment opportunities.
• Fundraising facilitation: Facilitate fund acquisition through debt or equity instruments.