The global pandemic has seen a lot of changes brought to businesses from all over the world.
If you are considering market entry into India for your company or organisation, then it can really help your chances of success to know the latest regulatory changes in the country. This article is going to take a look at the latest regulatory changes that might affect businesses entering the Indian market and offer advice to help you navigate these changes.
1. Introduction of new web-based incorporation forms
The Ministry of Corporate Affairs in India has updated its company incorporation form process and replaced the SPICE form with a web-based integrated form known as SPICe+. This new form should be easier for companies to use and allow for a lot more functionality. This can make it much easier to reserve business entity names and the allotment of GSTIN for stakeholders.
2. Changes to whole-time company secretaries
There have been tweaks to how private companies appoint whole-time company secretaries. The threshold of paid-up share capital has been increased from INR 50 million to INR 100 million. If you are looking to appoint a whole-time company secretary and are unsure about these latest changes, speak with our specialist advisors at Seamless Global Business and Expansion Solutions. We can guide you through these regulatory changes and ensure you have a whole-time company secretary appointed.
3. Labour law amendments
Parliament has decided to make a number of changes to labour laws in India to harmonise the organised and unorganised sectors of business. Three new labour codes have been passed that might affect how you do business. These changes are drastic, so it is recommended that you speak with a company that can help you with overseas expansion into India.
4. FDI flowing restrictions
Foreign Direct Investment has been amended to stop the opportunistic acquisition of Indian companies struggling due to the pandemic. New legislation from the Government has outlined that no FDI flowing from countries that share a land border with India is allowed.
5. The Equalisation Levy
The Government has expanded the scope of the Equalisation Levy to incorporate digital taxation. This will change how e-commerce companies operate and will be taxed at a rate of 2%. This is great news for businesses looking to enter India with an already successful online business model. At Seamless Global Business and Expansion Solutions, we can help you work through the Equalisation Levy to set up your business in India.
6. Removal of Dividend Distribution
Tax Corporates no longer pay tax on dividends that are declared because dividends themselves are now taxable in the hands of shareholders. This means that shareholders can unlock the benefits made available to them under the tax treaty signed between India and their home nation. If you are considering unlocking these benefits but don’t know how we can help. Contact our team at Seamless Global Business and Expansion Solutions today.
7. Amendments in FCRA
The Foreign Contribution Regulation Amendment Act 2020 outlined new compliance measures for foreign contributions to businesses. There have been some key changes that have occurred as a result of these amendments – some are good, others could be problematic. If you are concerned about the amendments in FCRA, we advise that you get in touch with us at Seamless Global Business and Expansion Solutions.
8. Changes to CSR provisions
A few key changes have been made to the Corporate Social Responsibility Policy that will affect CSR projects. If you are involved in a CSR project, for example, you will need to provide annual action plans moving forward. These changes are wide-reaching, so if you are unsure about how they might affect your business, get in touch with us.
9. Relaxed rules around digital meetings
Shareholders may participate in general meetings remotely via electronic communications until December 2021. This change should help companies who are approaching their annual general meetings.
At Seamless Global Business and Expansion Solutions, we understand that these updates could cause a dramatic change to how you do business in India. That is why we have a dedicated team of specialists available to help you navigate these changes and keep your business running smoothly.
To find out more about how we can help your business, or if you are looking to enter the Indian market, contact us today.