Benefits For Company Incorporation In India For Japanese Investors

Since a few decades, India has been seen as a lucrative market for company incorporation. The magnitude of a foreign investment indicates a promising future of the Indian economy, indicating more than one benefits of foreign company incorporation in India. India is one of the most upcoming countries in stimulating the global trade that leads to an increasing number of international businesses interested to invest in the market of India. India is the third-largest economy in Asia and one of world's fastest-growing economies. So the majority of the developed nations are quite keen to tie up with India. Also, the youth population in India is quite high.

Just like many developed nations, foreign investments from Japan are getting diverse by extending to various sectors that have received FDI from 2016 – 2018 the period of including consumer durables, retails, textiles, food & beverages and banking. One of the key spot lights has been the 12 industrial parks that are to be set up by Japan across various Indian states that will also contribute to economic corridors that Japan plans to create in India. Japan is currently the biggest foreign direct investor in India and also the highest investor from a single country source. The cumulative Japanese FDI in India is $ 25.67 billion between 2000-2017 also, Japanese FDI constituted of 8% of India’s overall FDI during this period.

This being stated, the above stats clearly shows the flourishing inter-national ties between Japan and India which makes India quite a favorable domain to register and operate their businesses in India for Japanese nationals.

Necessary investment decisions are taken using a mix of above factors including but not limited to economic stability, labor charges, capital costs, other support services, government incentive schemes and geographically strategic environment. Other factors such as quality of life for non-natives, health care facilities, blue-collar worker competencies, quality of local businesses partners, cultural heterogeneity, inter-personal relationships, scope of entrepreneurship, dynamism etc. In light of the above factors, India indeed offers an affirmative environment. This allows incorporation and sustainability foreign investors execute their businesses by recognising the opportunities for growth at a granular level.

Let us look at what precisely company incorporation/ registration means:

What is company incorporation?

To start a business in India, company incorporation is the first step. It is basically a process to establish your company legally registering one’s business as a legal entity gives you the right to start business operations in the country. Regardless the size of the business, registration always offers legal bounding and safeguard for the company. Contrary to earlier times when registering the business was a hectic job, presently the processes simplified with easily accessible availability of online forms and appropriate guidelines over the internet. Hence Japanese foreign investors can make their businesses operational simply by incorporating company in India.

Benefits Japanese foreign investors can have by company formation in India:

• Substantial Population: India not only has a large population but also a major part of that population is counted as youth. By that logistics, doing business is one of the vital advantages for any starting-up a business in India. The young generation of the country & faster growth of economic power assures the country to be a magnetite for foreign companies for the upcoming decades.

• Broad Trade Network: India has a substantial network of management and technical institutions. This is seen as one of the highest international standards with the advantage of free regional trade agreements in support. Moreover, there are various trading partners in which foreigners can work with as all of these trading institutions evolve human resources.

• Indian Work Ethics: Indians are renowned for their work ethics all over the world. The amalgamation of high number skilled youth with willingness for vocational competencies put the work sets of India on another level apart from its South Asian counter-parts. Therefore, businesses can persistently increase with a good rate of productivity.

• Foreign Direct Investment: With easy start-up economic policies, the government is organizes various reforms to create the investing possibilities for getting new foreign direct investment (FDI). Hence, some of the initiatives have been undertaken to take the edge of the business environment from all the regulations & policies. With policies like, 90 double tax avoidance agreements (DTAAs) and 42 free trade agreements (FTAs), reducing the total withholding taxes for foreign business investors to make the country more economically breathable.

• Stable Political and economic ties: Japanese investment in India between 2000-2019 has been $30.7 billion. The emphasis now is to reverse the effect of Covid-19 and return to similar level of FDI. Some reports suggest that by the next Summit, Japan may announce a proposed plan for FDI of $1.5-2.5 billion. This shall portray confidence in the Indian economy towards stable trade relations. For Japan, economic engagement is the most endearing sign of a strategic political and economic partnership.

India is expected to attract foreign direct investments (FDI) of US$ 120-160 billion per year by 2025, according to CII and EY report. Over the past 10 years, the country witnessed a 6.8% rise in GDP with FDI increasing to GDP at 1.8%. In terms of attractiveness, investors ranked India #3; ~80% investors have plans to invest in India in the next 2-3 years, while ~25% reported investments worth >US$ 500 million. Economic relations between India and Japan have vast potential for growth, given the complementary that exist between the two Asian economies.

India is an open, transparent and a development oriented democracy with a o-bust and easily accessible FDI regime making it a new manufacturing capital. With cheaper labor, easily accessible resources, economic transparencies, political stability India can provide abundant trade and business opportunities for Japanese investors. Also, India’s attractiveness lies in the way it treats existing foreign investors. Thus Japanese investors have a smooth road for registering their companies and operating their business in India.

India is expected to attract foreign direct investments (FDI) of US$ 120-160 billion per year by 2025, according to CII and EY report. Over the past 10 years, the country witnessed a 6.8% rise in GDP with FDI increasing to GDP at 1.8%. In terms of attractiveness, investors ranked India #3; ~80% investors have plans to invest in India in the next 2-3 years, while ~25% reported investments worth >US$ 500 million. Economic relations between India and Japan have vast potential for growth, given the complementary that exist between the two Asian economies.

India is an open, transparent and a development oriented democracy with a o-bust and easily accessible FDI regime making it a new manufacturing capital. With cheaper labor, easily accessible resources, economic transparencies, political stability India can provide abundant trade and business opportunities for Japanese investors. Also, India’s attractiveness lies in the way it treats existing foreign investors. Thus Japanese investors have a smooth road for registering their companies and operating their business in India.