Navigating India’s Business Licensing Framework for Foreign Businesses 

Starting a business in India involves securing essential approvals and licenses, which differ based on the industry and the chosen business structure. These typically include company incorporation, tax registrations (such as GST), sector-specific permits, environmental clearances, and compliance with labour regulations. Navigating this intricate regulatory framework can be particularly challenging, especially for foreign enterprises entering the Indian market. Here are some of the essential approvals and licenses needed for doing business in India.

1. Company or LLP Formation

• Most businesses in India start as a private limited company or a Limited Liability Partnership (LLP), both regulated by the Ministry of Corporate Affairs. 
• Entrepreneurs expecting an annual turnover of ₹22 lakh or more should register their company or LLP to gain a separate legal identity and limited liability protection. 
• LLP registration also offers easy ownership transfer and ensures the business continues even if partners change.

2. GST Registration

• Businesses in India have to register for the Goods and Services Tax (GST) if their annual turnover exceeds INR 20 lakh. In Special Category States, the limit is INR 10 lakh. 
• Any business supplying goods within a state or operating as an e-commerce aggregator, must register for GST irrespective of their turnover. 
• Foreign business owners have to complete their GST registration within 30 days of starting operations in India. 

3. Udyog Aadhar

• Udyog Aadhaar registration is essential for entrepreneurs planning to set up and run micro, small or medium enterprises in India.
• The eligibility is strictly based on the business’s investment level. For example, manufacturers are assessed by their spending on plant and machinery, while service providers are assessed by their investment in equipment or software.
• Once the registration is done, firms can access various government benefits, subsidies, and support schemes.

4. FSSAI License

• Foreign companies entering India’s food and beverage sector must get an FSSAI registration or license. 
• FSSAI registration is categorised into three types: Central License, State License, and Basic Registration. 
• The right option depends on the company’s size, annual turnover, and import/export activities. 

5. Import-Export Code (IEC)

• Anyone importing or exporting from India must obtain an Import Export Code (IEC) and ensure it is recorded with customs. 
• Banks require a valid IEC to process international transactions. 
• In some cases, businesses may also need Non-Banking Financial Company (NBFC) identification from fintech or non-banking institutions. 
• The Directorate General of Foreign Trade (DGFT) is the only authority that issues IECs.

Apart from the approvals and licenses mentioned above, the following authorizations also ensure that foreign businesses entering India operate safely, responsibly, and in full compliance with the law:

• Fire department permit to confirm that workplaces handling flammable materials follow essential safety measures. 
• Environmental permits state that industrial activities do not harm air, water, or natural resources. 
• Shop and Establishments Act license, which regulates working conditions, employee welfare, and basic operational standards. 

By obtaining all the essential approvals and licenses, foreign companies are able to start their business in India in full compliance with the country’s regulatory framework. If you are looking for expert guidance or a reliable partner to simplify the process of obtaining their licenses, feel free to reach out to us at support@corporateleaps.com.