Doing Business in India - RSM Austria

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trading in derivative based on BSE Sensex from 9 June 2000 and trading in stock options of certain companies from 9 July 2001. 5.4.2 National Stock Exchange National Stock Exchange (NSE) started operations in 1994 with a view to facilitating transparent trading. The NSE provides nation-wide trading facilities to investors through established network linkages in about 350 cities nationwide. The NSE had 1587 listed companies as on 31 March 2009 with a market capitalization of Rs. 47,019 billion (US$ 950 billion) and average daily volume of Rs. 45 billion (US$ 1.03 billion). The NSE is India’s primary exchange for wholesale debt. NSE introduced trading in derivative based on Nifty Index from 12 June 2000 and trading in stock options of certain companies from 2 July 2001. 5.4.3 Listing Requirements There is no statutory requirement for public limited companies in India to have their shares listed on a recognized stock exchange. However, the companies have to be listed if their shares or debentures are offered to the public for subscription by prospectus. Companies have to fulfill the stock exchange requirements in order to have their shares listed. In case the company does not satisfy the prescribed conditions of the stock exchange and is not admitted to the exchange, it has to refund the amounts paid by subscribers. 5.5 Specialized Financial Institutions There are numbers of specialized financial institutions in India at the national as well as the state level. India has an integrated structure of financial institutions known as All India Financial Institutions (AFIs), which provide term finance and other assistance to industries. Some of the most important financial institutions, which play a very instrumental role in India’s development are the Industrial Development Bank of India (IDBI), the Industrial Finance Corporation of India (IFCI) and the Industrial Reconstruction Bank of India (IRBI). India also has other financial institutions, which are set up for specific purposes. These include the National Bank for Agricultural and Rural Development (NABARD), the Shipping Credit Corporation of India, the National Housing Bank and the Discount and Finance House of India, which is a specialized institution to develop an active secondary market for money market instruments. 5.6 Investment Institutions Most of the specialised investment institutions in India are in the public sector. These include the Unit Trust of India, the Life Insurance Corporation of India, General Insurance Corporation, mutual funds set up by subsidiaries of the State Bank of India and other nationalised banks and other financial institutions. 5.7 Mutual Funds Mutual funds play a significant role in the capital market. They are established in the form of trusts under the Indian Trusts Act and are operated by separate asset 16 DOING BUSINESS IN INDIA
management companies. The mutual fund market was dominated by public sector financial institutions and public sector banks till 1993, when the government opened up the sector to private participation. The gross mobilization of resources by all mutual fund schemes during July 2009 was around Rs. 9,288 billion (about US$ 190 billion). Mutual Funds are now permitted to make investment in short term as well as long term foreign debt securities with highest foreign currency credit rating by accredited / registered credit rating agencies in the countries with fully convertible currencies including government securities of the countries having AAA rating. 5.8 Non-Banking Finance Companies The Non Banking Finance Companies (NBFCs) form an integral part of the Indian financial system. They have to conform to the overall framework of the monetary and credit policy of the government. The government has permitted foreign direct investment in NBFCs in merchant banking, underwriting, portfolio management services, investment advisory services, financial consultancy, stock broking, asset management, venture capital, custodial services, factoring, credit rating agencies, leasing and finance and housing finance. Foreign direct investment in the NBFC sector is put on automatic route subject to compliance with guidelines to be issued by Reserve Bank of India. 5.9 Credit Rating Agencies The credit rating agencies rate corporate debt and equity securities such as debentures, shares and commercial paper. They also rate the credit risk of companies, a factor often used by nationalized banks in evaluating loan applications. Credit ratings have become all the more necessary because it has become mandatory for companies to obtain a credit rating before issuing convertible and non-convertible debentures. The Credit Rating Information Services of India Limited (CRISIL), the first credit rating agency in India was established in January 1988 and the Investment Information and Credit Rating Agency of India (ICRA) was established in March 1991. Credit Analysis and Research Ltd. (CARE) is another leading credit rating agency and was set up in November 1993. 6.0 INCENTIVES FOR INDUSTRIES 6.1 Concessional Finance New and existing businesses established in specified backward areas of the country are able to obtain finance for major expansion plans at below normal interest rates. Other benefits may include low commitment fees and extended repayment periods. 6.2 Central Government Investment Subsidy Industrial undertakings located in specified backward areas, which are largely the DOING BUSINESS IN INDIA 17
Page 1: International global excellence in
Page 4 and 5: Doing business in India
Page 6 and 7: Marine Drive, Mumbai
Page 8 and 9: Contents Hawa Mahal, Jaipur
Page 10 and 11: Education .........................
Page 12 and 13: SIGNIFICANT COMPANY LAW REGULATIONS
Page 14 and 15: ANNEXURE 1 Sectors Prohibited for F
Page 16 and 17: Chapter 1 India - A Profile Golden
Page 18 and 19: 2.2 Language India is a land of man
Page 20 and 21: 5.2 Communication The Indian teleph
Page 22 and 23: 7.5 Public Holidays The statutory p
Page 24 and 25: CHAPTER 2 INDIAN BUSINESS AND INVES
Page 26 and 27: This resulted in a fall in the Bomb
Page 28 and 29: 4.3.3 Designs After expiry of three
Page 30 and 31: non-banking finance activities viz.
Page 34 and 35: same as those where concessional fi
Page 36 and 37: 10.3 Low Research and Development C
Page 38 and 39: CHAPTER 3 BUSINESS ENTITIES 1.0 FOR
Page 40 and 41: Sr. No. Criteria Requirements 1 Tra
Page 42 and 43: The project is funded by inward rem
Page 44 and 45: cause the disassociation of the par
Page 46 and 47: 2.1.2 MOA 2.1.3 AOA Companies for r
Page 48 and 49: paid up equity capital can be less
Page 50 and 51: The requirements for public and pri
Page 52 and 53: 3.0. STATUTORY REQUIREMENTS FOR COM
Page 54 and 55: 3.4 Online Filing System Ministry o
Page 56 and 57: Section Nature of default 168 Defau
Page 58 and 59: 4.0 SIGNIFICANT COMPANY LAW REGULAT
Page 60 and 61: 4.7 Audit Committees For better cor
Page 62 and 63: The meetings of the board are requi
Page 64 and 65: Chapter 4 Human Resources Kathakali
Page 66 and 67: Employee benefit What is it? Applic
Page 68 and 69: Employee benefit D e p o s i t L i
Page 70 and 71: 2.5 The Equal Remuneration Act, 197
Page 72 and 73: The Factories Act safeguards agains
Page 74 and 75: CHAPTER 5 FOREIGN INVESTMENT IN IND
Page 76 and 77: 2.3 Prohibition on investments 2.3.
Page 78 and 79: ii. Subject to compliance with the
Page 80 and 81: ii. iii. iv. The NRI investor has t
Page 82 and 83:
ii. On repatriation basis An NRI ca
Page 84 and 85:
Indian company can issue ESOPs to e
Page 86 and 87:
ii. iii. iv. The foreign equity aft
Page 88 and 89:
vi. Branch Offices have to submit A
Page 90 and 91:
ii. ECB up to US$ 20 million or equ
Page 92 and 93:
3.2 Approval Route 3.2.1 Eligible B
Page 94 and 95:
3.2.6 End Use not permitted i. Util
Page 96 and 97:
issued by Reserve Bank from time to
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Sr. No. Sector/Activity FDI Cap / E
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Sr. No. II C POWER Sector/Activity
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Sr. No. 29. Sector/Activity Telecom
Page 108 and 109:
Chapter 6 Taxation System India Gat
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Entity Domestic Company Financial y
Page 112 and 113:
**** Mutual funds, other than equit
Page 114 and 115:
interest deductible is restricted t
Page 116 and 117:
2.4 Tax Relief In order to encourag
Page 118 and 119:
Section Details of Exemption / Dedu
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Section 35 DDA 54G 54GA 54EC 10(34)
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Sr. No. Nature of activity and loca
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Sr. No. xviii Nature of activity an
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No deduction under 80IA, 80IB, 80IA
Page 132 and 133:
Tax is payable in advance on income
Page 134 and 135:
3.1.2 Other Non-corporate Entities
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the Finance Act 2010, 'bullion' is
Page 138 and 139:
Rs. 40,00,000. The scheme is applic
Page 140 and 141:
4.5 Income of Offshore Funds Income
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7.3 Advance Rulings The Indian gove
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9.0 INDIRECT TAXES 9.1 Goods and Se
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on goods manufactured and vice vers
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Annexure I Double Taxation Avoidanc
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Sr. No. Country Dividend [Note 1] T
Page 152 and 153:
Page 154 and 155:
Page 156 and 157:
ANNEXURE II: TAX DEDUCTION AT SOURC
Page 158 and 159:
NOTES 142 DOING BUSINESS IN INDIA
Page 160 and 161:
Page 162 and 163:
Page 164:
RSM International Executive Office,
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