With its rapidly growing consumer base, India offers an exciting opportunity for international companies to extend their base to its domestic market. The market potential in India surpasses that of most other economies with its growing population and a rapidly expanding middle class with great spending capacity. However, entering the Indian market comes with its fair share of challenges, which involves navigating a labyrinth of regulatory and legal complexities. The complexity of India’s legal and regulatory landscape may be extremely overwhelming for new businesses entering the market. The unfamiliarity with local laws and regulations is bound to be daunting for new businesses. Hence, hiring Company Management Services, which provide the assistance of a legal expert through General Counsel (GC) Services, particularly from law firms of repute in India, can be a game-changer for the expansion process.
A. Exploring Company Management Services
As the name suggests, Company Management services involve delegating certain parts of company management activities and responsibilities to law firms or other institutions for their expert guidance in managing company affairs. General Counsel Services are often offered as part of broader Company Management Services by law firms in India. Services offered under Company Management include a wide range of support functions critical for the smooth operation of their client’s business. From licensing, tax advisory, regulatory compliance to corporate governance, risk management, intellectual property protection, and dispute resolution, General Counsel Services cover a wide variety of functions for business efficiency and management. While the overall scheme of Company Management Services offers a holistic approach to business management, GC Services, in particular, enable businesses to prioritise their core operations without investing resources in legal and regulatory intricacies. GC Services aim at simplifying the market entry process and ensuring compliance with all necessary regulations.
B. General Counsel Services & Business Expansion Needs
General Counsel Services offer assistance to expanding businesses in multiple ways including:
- Studying the domestic market
The Indian market, with its massive economic potential, attracts significant foreign business participation. With significant variations in consumer preferences, regulatory and legal requirements, business practices across different states, it is dynamic and diverse. Before a foreign business enters this new territory, it is imperative for them to understand and study the market to understand the variables that govern it. GC Services can be availed in conducting thorough market research and exploring the domestic market dynamics, consumer behaviour, competition, industry practices, etc. GC Services can assist an expanding business in the initial phase by providing valuable insights into the market environment that their client is venturing into.
- Registration, licensing and approvals
One of the first instances of engagement between a foreign business and the regulatory framework and its governing bodies comes in the form of business registration and applying for necessary licenses and approvals before engaging in business activity in the domestic market. Starting with business registration, which is required to be done with the Registrar of Companies within 30 days of setting up in compliance with the Companies Act, 2013. Depending on the industry/sector, various licenses, permits and approvals may be required at different levels of government, such as the central, state, and local levels. A GC Professional can help a new business identify the specific licenses and approvals required for their client’s business and the most effective way to apply for them. They also help the business understand the timeline within which these licenses/approvals/permits may be received and help the business manage expectations and plan accordingly. It is imperative to note that the application procedures for some of the approvals and licenses are extremely tedious and technical, running into minute details for which the assistance of an expert may be necessary. It speeds up the process and reduces future legal risks that may arise due to poor understanding of the process.
General Counsel Services can help the business identify the sector-specific licensing needs of the business and facilitate in obtaining them.
- Regulatory Compliance
Expanding to India can be a rewarding endeavour, but it requires careful planning and adherence to the regulatory framework. India’s regulatory framework is characterized by numerous laws and regulations governing various aspects of business operations. For a foreign company aiming to expand into India, it is crucial to meet all compliance requirements to avoid operational disruptions, liability for non-compliance, and potential cancellations of licenses and permits. GC Services provide ongoing support to ensure that the business maintains a strong record of compliance and adheres to all regulatory requirements. From monitoring any changes or updates in regulations, introducing best industrial practices, and conducting regular compliance audits.
- Tax Advisory
India’s complex tax structure, with taxes levied at both central and state levels, makes navigating the tax system extremely challenging for foreign businesses entering the Indian market. General Counsel Services offers expert tax advisory to assist businesses in understanding the incidence of tax on their activities and quantify their tax obligations. They also advise on tax-efficient strategies, including assistance with filing, identifying areas of tax exemptions and benefits, and ensuring compliance with Goods and Services Tax (GST) regulations. GC Services offer comprehensive tax advisory and help their client optimize their tax liabilities. The assistance offered by GC Services are not only limited to GST filings and navigating the Income Tax regime, but they also offer expert guidance on navigating international taxation. With India entering into the Double Taxation Avoidance Agreements (DTAAs) with various countries, GC Services offer guidance on the application of DTAAs, Permanent Establishment (PE) rules, and cross-border transactions and help the business in mitigating the risk of double taxation.
- Risk Management, Dispute Resolution and IPR
A foreign company expanding in India has to cater to the requirements listed above while simultaneously also covering all bases for potential disputes, losses and disruptions in business activity. GC Services not only offer guidance on regulatory, compliance, strategic advisory and market research but also effectively help businesses in managing risks, protecting property and assets and also offer representation in any phase of dispute resolution. GC offers ongoing risk assessment, implementation of internal controls and checks, review of all terms of contracts, and continuous training towards compliance and risk mitigation. They also safeguard business interests by invoking the legal framework for the protection of the intellectual property rights of the business. By leveraging these services, a business can focus completely on operations and have an expert deal with the regulatory and other complexities of setting up business in India, making the process of expanding to India efficient and seamless.