What is Startup India Scheme and Is It Available to Foreign-Owned Companies?
Launched in January 2016, Startup India is a flagship initiative by the Government of India aimed at supporting and promoting startups by creating a robust ecosystem.
Yes, foreign-owned startups incorporated in India can avail of the benefits under this scheme, provided they fulfill the required conditions, including:
- Registered as a Private Limited Company, LLP, or Partnership in India
- Incorporated less than 10 years ago
- Annual turnover not exceeding INR 100 crore
- Working towards innovation, development, or improvement of products/services
- Must not have been formed by splitting or reconstructing an existing business
You can validate from Startup India website.
Why Should Foreign Companies Choose India for Starting a Business?
India is not just a rapidly growing economy, but also a favorable destination for foreign investors and startup founders due to the following reasons:
- Cost Efficiency: Operating costs in India are significantly lower than in Western countries.
- Large Consumer Market: Over 1.4 billion population provides a vast target market for any product/service.
- Skilled Workforce: India has a large English-speaking, tech-savvy talent pool at affordable wages.
- Government Support: Startup India and other schemes actively promote foreign participation in business.
- FDI-Friendly Policies: FDI is allowed up to 100% in most sectors under the automatic route.
- Growing Digital Ecosystem: Increased smartphone and internet penetration makes scaling faster.
Benefits of Startup India Scheme for Foreign-Owned Companies
The Startup India Scheme provides an attractive range of benefits for startups, including those with foreign ownership. Here’s how it helps:
| Benefit | What It Means for Foreign-Owned Startups |
| Self-Certification | Startups can self-certify under labor & environment laws. |
| Tax Holiday | Exemption from income tax for 3 years in the first 10 years of incorporation. |
| Fast-Track IP Protection | Priority processing of patent applications with up to 80% fee reduction. |
| Easy Winding Up | Can wind up operations in 90 days under the Insolvency & Bankruptcy Code. |
| Access to Funds | Eligible to apply for funding through the Rs. 10,000 crore Fund of Funds scheme. |
Additional Benefits:
- Recognition by DPIIT: Enables faster government clearances and access to benefits.
- Startup India Hub Access: Helps with networking, mentoring, and knowledge exchange.
- Public Procurement Exemptions: Startups can bid for government tenders without prior experience or turnover.
- Participation in Global Events: The Government facilitates exposure through participation in international expos.
- No Inspection for First 3 Years: No labor inspections unless a specific complaint is received.
All benefits are valid only if the startup is recognized by DPIIT. Startups can apply for DPIIT recognition via: https://www.startupindia.gov.in
Step-by-Step Process to Register Under Startup India for Foreign-Owned Companies
Here is how foreign entrepreneurs can register their startup under this scheme:
- 1. Incorporate Your Business in India
- Choose a suitable entity type: Private Limited Company or LLP
- Register with Ministry of Corporate Affairs (MCA)
- Must have a registered business address in India
- Ensure at least one resident director is appointed (as per Companies Act, 2013)
- 2. Get DPIIT Recognition
- Create an account on startupindia.gov.in
- Fill in the online application with details like business nature, objectives, and founder details
- Upload necessary documents, such as:
- Certificate of Incorporation
- Details of funding or innovation
- PAN, business address proof
- Wait for approval (usually processed within 10-15 working days)
- 3. Apply for Startup India Benefits
- After recognition, startups can apply for
- IP facilitation benefits
- Tax exemption under section 80 IAC
- Angel Tax Exemption under section 56(2)(viib)
- Use the same portal to track all applications and benefit claims
How EbizFiling Can Help Foreign-Owned Companies?
EbizFiling specializes in helping foreign entrepreneurs launch and register their startups in India. Here’s how we make it easier:
- Complete Business Incorporation including MCA, PAN, and GST
- DPIIT Registration Support with 100% error-free documentation
- Startup India Benefit Advisory to ensure no scheme is missed
- End-to-End Compliance from legal to tax obligations
- Dedicated Relationship Manager for quick updates and guidance
Conclusion
India’s Startup India Scheme is open to foreign-owned startups registered in India. If basic conditions are met, they can enjoy tax benefits, IP support, and easier funding. The initiative promotes growth, compliance, and global reach. With EbizFiling, you get expert help from day one to stay fully compliant.
Suggested Read :
RBI Rules for Foreign Subsidiary Companies
Branch Office and Indian Subsidiary
How to start a Subsidiary Company in India?
Foreign Subsidiary Company Compliance in India
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