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India   Expansion
India Expansion

India has become an increasingly attractive destination for doing business. Foreign direct investment has been on the rise with a growing number of international businesses looking at establishing operations here. However, the risks associated with venturing into a new territory with a complex accounting, tax and regulatory environment are many. A multitude of languages and vast cultural differences within the country itself add to the difficulties and costs of doing business in India.

Whether you are an Indian business looking to expand your existing operations in the country or a foreign company planning to set up in India, we provide a one-stop solution and handhold investors through the intricacies of the process. Besides our competence in accounting and tax, our strength lies in the ability to be your business and commercial adviser and managing your entire entry plan for India as a comprehensive project. We work with you right from the conceptualisation phase to being your implementation partner in greenfield business set-ups, acquisitions and joint ventures.

We can assist you with all that needs to be done while entering India right from liaising with a market research firm, pre-investment advisory on available opportunities, validating your business plan, selecting the correct form of entity, providing regulatory and tax advisory, scouting for a location and acquiring land, hiring the right people to getting you in touch with the right vendors and monitoring them. Once your business is set up, we can even take care of your book-keeping, payroll, management reporting, company secretarial and compliance requirements. With years of experience in India, we can add value to your expansion plan by looking after these functions while you focus on your business.

Based on your company size, your needs may differ – we customise our services to your requirements. We can help you at any stage of your entry plan. As your partner, we will be responsible for your tasks just like a trustee. We will share our local knowledge with you and design a package of services that is relevant specifically to your business. Our experience and practical and commercial understanding of India equip us to help you successfully establish operations in India. Through our services, we provide your business with tremendous support and care. We are here to think for you and act for you.

The SKP Value Chain

The SKP Value Chain

Entry Strategy

We can assist you with gathering and understanding all the information required to create an efficient market entry strategy for India, helping you reduce costs by preventing mistakes at the very start of your expansion plan.

Market Research (customer study/market study)

We undertake specific B2B (business-to-business) or B2C (business-to-consumer) market research assignments for our clients across multiple industry sectors (customer study/market study). We have a project-management approach to assignments wherein our cross-functional teams study the business and regulatory scenario to give you a clear understanding of market size, business models, competitive landscape and regulatory requirements.

We leverage our extensive knowledge of India to offer solutions on supply chain, pricing structures, purchase processes/buying behaviour and go-to market strategies for our clients.

CEO-level Engagement

Often, the top management of a company may feel the need to interact with like-minded individuals with extensive local experience. On our advisory board, we have senior industry advisers who are former CEOs and Managing Directors of leading multinational companies. With their extensive experience in defining and executing the growth strategy for leading multinationals in India, deep understanding of the Indian market and sharp insights on key issues, we are able to assist companies in making a successful entry into India.

Business Tourism

Our extensive network of Indian and multinational companies, sector experts and industry associations, enables us to help you identify opportunities and make your business visit to India worthwhile. Senior executives coming to India can look forward to gaining a clear understanding of their industry through industry-specific presentations, CXO-level interaction with industry experts, B2B meetings with potential partners, visits to relevant industrial areas and hearing about the firsthand experiences of senior officials of companies from their country.

Pre-Investment Advisory

Regulatory Advisory

At SKP, we have a thorough understanding of India’s complex regulatory regime and compliance requirements and offer advisory services on:

  • Foreign Direct Investment Regulations
  • Company Law
  • Direct Taxation, including Jurisdiction Analysis
  • Indirect Taxation
  • Exchange Control Regulations
  • Capital Structuring
  • Foreign Trade Policy
  • Labour and Employment Regulations
  • Factory Regulations
  • Industry-specific Regulations

 

Financial Feasibility

Often companies realise that while the top line may be in line with initial forecasts, profits are not, even as planned investments continue. We assist our clients by vetting the initial business plan thoroughly, guiding them on how much to invest in the project and what returns to expect.

We follow a comprehensive process, starting with questioning the basis of top-line revenues, accounting for all possible costs and finally, adjusting expectations based on real tax implications. The outcome is a well-defined business plan that shows the expected returns while clearly highlighting the investment required along with the optimum timing.

Location Planning

When choosing a location, it is crucial to assess both qualitative and quantitative factors such as land, labour, infrastructure, logistics, taxes and incentives. We understand this requirement and ensure that our study gives you a clear choice of location after considering various factors, including:

  • Availability of electricity and associated costs for set-up and regular operations
  • Incentives being given by the Central and State governments
  • Logistics costs associated with operations, including the effect of various taxes
  • Cost of land and rental space
  • Support infrastructure in and around the proposed facility, including quality of roads, availability of ports/airports, etc.
  • Proximity to social infrastructure for employees and expatriates
  • Resource availability, including labour and sub-suppliers/contractors
Entity Formation

Selecting the right form of entity is crucial for any investor as this can have serious implications on the rights, growth potential, tax implications and legal/financial liabilities. At SKP, we assist clients in evaluating and establishing the following:

Wholly Owned Subsidiary:A private limited company is the most common form of entity in India. It offers a lot of flexibility in terms of permissible operations according to Indian regulations. The limitation on shareholder liability and the level of control on operations make it the preferred route for foreign businesses establishing their India operations.

Liaison Office (LO) and Branch Office (BO): While a private limited company is a popular form of entity for most multinationals, a Liaison Office allows for the easiest entry and exit options. Alternatively, a number of foreign companies also set up Branch Offices if they see revenue potential through trading, for example, and would like their profits to be freely repatriated (although with low growth potential in the near term).

Project Office (PO): A Project Office is an apt form of entity when a foreign company is planning to execute specific projects in India and needs to set up a temporary project/site office for carrying out activities related only to that project. The Indian government has now granted general permission to foreign entities for establishing project offices subject to specified conditions.

Limited Liability Partnership (LLP): A Limited Liability Partnership is a business entity that provides the benefits of limited liability of a company but gives its members the flexibility of organising their internal management based on mutual agreement, as in a partnership firm. This format is very useful for small and medium enterprises and for the services sector in particular, including professional services and knowledge-based enterprises.

Business Registrations

A business establishment must obtain the required business registrations for running operations smoothly and within the legal framework. However, these registrations differ by territory, industry and type of operations. We assist our clients by obtaining all the necessary registrations within clear timeframes. The registrations are categorised according to the functions of the proposed business establishment.

  • Service Establishments: These registrations are generally required by any business and include the Shops Act, Profession Tax, Importer-Exporter Code (IEC), Service Tax, Local Body Tax, etc.
  • Trading Establishments:In addition to the abovementioned registrations, trading entities also require registrations for Value Added tax (VAT), Central Sales Tax (CST), Special Valuations Branch (SVB), etc.
  • Manufacturing Establishments: Manufacturing entities have the most compliance requirements in terms of registrations.
    • Registrations: Excise, Industries Entrepreneur Memorandum (IEM/ EM), Pollution Control Board, Factories Act, Building and Construction Cess
    • Approvals: Diesel Storage, Gram Panchayat NOC, Building and Layout Plan, Excavation, Electricity and Water Connectivity, Lifts and Elevators, etc.
    • Labour Registrations: Provident Fund (PF), Employee State Insurance (ESI), Contract Labour Act, Building and other Construction Workers Welfare Cess Act, etc.
  • Specific Registrations: These are registrations specific to an industry or the type of activity to be performed by the proposed entity. These could include drugs, cosmetics, packaging, financial institutions, etc.

 

Subsequently, we also assist companies with their ongoing compliance requirements allowing them to focus on their core business.

Government Incentives

Specific incentives offered by the State or Central government pertain to location, investment size, industry and operations. At SKP, we can help you in quantifying as well as taking advantage of various benefits, which in effect reduces the cost of operations and frees up cash flows.

  • Investment Promotion Schemes: These include subsidised land, VAT/CST refund, Octroi refund, stamp duty and electricity duty refund/exemption, etc.
  • Sector-specific Schemes: These include schemes from the Central and State governments targeted at developing specific industries such as textiles, IT/ITeS, electronics manufacturing services, etc.
  • Export Promotion Schemes: These include Special Economic Zones (SEZ), Export Oriented Units (EOU), Export Promotion Credit Guarantee Scheme, Advance Authorisation Scheme, Focus Product/Focus Market Schemes, etc.
Project Support

Real Estate Support
We support our clients from the location planning stage to assisting in defining their real estate needs and coordinating the acquisition/lease. Our services include:

  • Assistance with scouting and short-listing
    • Approaching State Industrial Corporations and real estate vendors
    • Providing a comprehensive list of options
    • Physically visiting each site and providing comments and reports
    • Arranging discussions with the owners or Government officials on terms/considerations for acquisition or lease
  • Assistance with land acquisition
    • Assisting in negotiations with the land owner
    • Preparing terms of purchase, Letter of Intent, Memorandum of Understanding, etc. in consultation with lawyers
    • Coordinating for legal audit or due diligence
    • Assisting in land registration and subsequent transfer

 

Recruitment Support (set-up or operational phase)
We recognise the importance of finding the right talent for any organisation. A talented and committed employee becomes your greatest asset. At SKP, we assist you with the recruitment and selection process, from meeting the initial human resource (HR) requirements during the start-up phase to coordination with recruitment firms and providing a second opinion on candidates. We also ensure that the company is ready to enrol employees by creating tax-efficient salary structures, drafting employment contracts and creating policy documents that are in line with global management policies as well as Indian regulations.

Vendor Management Support
We can assist in managing all vendors including, civil contractors, architects, electrical vendors, distributors, etc. Our services include:

  • Drafting/vetting of the agreement contract
  • Verification of the legal compliance
  • Conducting project-related meetings
  • Monitoring progress and ensuring efficiency of work in terms of time and cost

 

Project Accounting
Our project accounting services help maintain proper control over the project flow, effectively utilise resources, ensure proper and accurate billing processes, streamline processes and save on cost and time. During this process, the related compliances and efficient utilisation of funds can be tracked and irregularities can be pointed out. Our services include:

  • Setting up basic accounting procedures and protocols
  • Fund flow/cash flow management for the project
  • Monitoring of overall project cost vis-à-vis budgeted cost
  • Withholding tax and indirect tax compliances
  • Management reporting
  • Filing of routine tax returns with the authorities
Systems Support

SAP/IT Implementation
Enterprise Resource Planning (ERP) software is extremely useful in integrating a global business and providing a ‘common language’ throughout the business. It can lead to tremendous savings in cost, time and effort, thereby improving productivity. However, any errors during the implementation phase are extremely difficult to correct. We could assist in the entire SAP transition. With our proven expertise in project management and process consulting, we can ensure successful implementation in the following manner:

Activities as a project manager

  • Plan, coordinate, control, follow up and document the entire project
  • Assist in planning and allocation of resources
  • Ensure proper progress towards the specified outcome according to the set timelines
  • Ensure that the project is carried out in accordance with the agreed methods

 

Activities as a process consultant

  • Understand and document “As Is” business processes
  • Design “To Be” business processes in line with current needs and future business outlook
  • Assist in data conversion and cleansing
  • Assist in fine-tuning the ERP system to meet global and local needs efficiently
  • Assist in integrating existing systems with the ERP system

 

Human Resources/Administration Function Set-up 
We extensively support companies in setting up their Human Resource and Administration processes during the initial phase of operations. We work closely with our clients to implement various HR policies and practices for the smooth functioning of their organisation. This mainly involves:

  • Assistance in drafting employment agreements for various employee grades, including coordination with lawyers for legal vetting
  • Creation of Work Rules (HR Handbook and Manuals) and integration with global policies of the parent company
  • Local employee on-boarding – joining formalities, documentation and induction of local employees
  • Employee record maintenance – HR file administration
  • Employee exit/closure formalities
  • Administering attendance and leave records
  • Coordination with payroll and other HR vendors
Ongoing Business Support

We can simplify managing your company’s ongoing business functions by providing a back office for your accounting, payroll, financial reporting, tax and other regulatory compliances. If you are a subsidiary of a foreign company in India, we can become your Chief Financial Officer and your in-house accounting team while you focus on your business. We could also help you set up your own F&A team by helping you hire the right people and designing the necessary systems for you.

We aim to facilitate the smooth running of your business with improved efficiency by performing these routine functions for you in a cost-effective manner.

To know more, please visit our Finance and Accounting page.

Joint Ventures & Acquisitions

We have assisted several foreign and Indian clients in their attempts to grow via this inorganic route. We believe that successful joint ventures are those that result in a win-win situation for both the entities involved. With this in mind, we provide a holistic perspective in designing, negotiating and documenting the proposed joint venture. Due consideration is given to the cultural, legal, commercial, tax and exchange control aspects. Our comprehensive services take clients through the entire process from the pre-investment stage to post-investment hand-holding, ensuring that they do not make any critical mistakes.

Besides assisting in partner selection, due diligence, valuation, negotiations, etc. we work with you through the post set-up stage. Our monitoring services help gauge whether the milestones and spirit of the joint venture agreement are being adhered to.

To know more, please visit our Transaction Support page.

Procurement Consulting

 SKP has a pool of highly experienced individuals with extensive experience in planning and executing sourcing strategy for large multinational manufacturing companies in India. Our unique ability to create a team based on our client’s needs ensures service delivery in the most efficient manner possible. We have a defined process to support our clients in building an effective and efficient supply base in India. The process is designed to provide cost-effective sourcing solutions in the least amount of time.

Our services include:

  • Strategic sourcing advisory
  • Vendor identification
  • Vendor evaluation and selection, including due diligence
  • Vendor contracts
  • Vendor performance monitoring

 

We have been instrumental in reducing cost, leading to significant savings for our clients. We have:

  • Provided end-to-end support for sourcing strategy and execution
  • Identified suppliers according to the exact sourcing requirements
  • Been responsible for complete vendor development
  • Achieved substantial cost reduction in sourcing compared to the estimated cost
  • Achieved cost reduction through use of alternate materials
  • Achieved cost reduction in logistics
  • Improved efficiency at different levels of the supply chain
Growth Strategy

 To test keep pace with the ever-changing business environment, companies need to reassess their business strategy with a different perspective and change plans accordingly. With our team of experienced professionals and business leaders from various industries, we are well positioned to assist companies in their growth strategy, providing end-to-end solutions.

We help companies expand their business so that India can become a stronger hub for them. Companies established in India may want to move up the value chain in terms of:

  • Converting from a Representative office to a Wholly Owned Subsidiary
  • Moving up the value chain from Trading to Assembly or Manufacturing
  • Adding a new product line
  • Exporting from India to establishing trading presence outside India (global expansion)

 

Our approach for the assessment and formulation of growth strategy is as follows:

  • External and internal analysis
  • Strategy formulation
  • Roadmap for implementation
  • Detailed implementation plan
  • Implementation support