Skip to content
Home » Prepare for smooth operations of your subsidiary in India

Prepare for smooth operations of your subsidiary in India

subsidiary in India

In recent years, India has witnessed a spike in overseas businesses coming to the country and establishing their business presence. As reported in The Economic Times, the Ministry of Corporate Affairs pointed out that more than 5,000 foreign companies registered in India in 2021 alone. And, in 2022, as many as 5,068 foreign companies have registered their business presence in India. The rising acceptance of remote working as a popular work design worldwide, due to the COVID-19 pandemic, has resulted in the surge of foreign businesses coming to India. 

However, if we also study the number of overseas companies that existed or ceased their business operation, the number is also very high. In 2022, only 3,291 companies were active out of 5,068. It shows that nearly 36% of overseas companies failed to succeed in their business in India.

As many business analysts pointed out, the main reason for the high failure rate for overseas companies in India was the lack of a deeper understanding of the Indian ecosystem and compliance issues. So, we put together an approach for successfully setting up a subsidiary in India and running it effectively.

Routes to consider for successful subsidiary formation in India  

With the availability of lucrative market opportunities, India has emerged as a hot destination for business expansion, especially for service-based companies. Many small & medium businesses (SMBs) look for India as an attractive and significant market due to its abundance of highly skilled talents and cost-saving operation opportunities. Many overseas companies prefer their business presence in India to tap into such market opportunities and get the maximum benefits. However, jumping into a subsidiary formation without proper preparation reduces the chance of successful business operations.   

To ensure the assured path to successful company formation in India, you must be also aware of financial preparedness before getting into resource preparation. You must have a thorough understanding of things to know before you form a subsidiary company in India. 

For resource preparation, you can typically examine the level of skills and capabilities of Indian talents to execute your desired projects/works by working with Indians. On knowing the Indian professionals and the skill availability, the next step is understanding how you can hire, manage, and retain your remote employees. 

Knowing the capabilities of the resources and understanding how to manage and execute human resource-related activities are crucial steps you must take to ensure a successful Indian company operation.

Testing whether Indian talent is capable of handling your tasks 

One of the crucial tasks to understand the best way for subsidiary formation is to find out whether the targeted country has talent that can handle your desired projects efficiently. It’s important to understand whether India has skillful resources to execute your tasks cost-effectively and efficiently within the given timeframe. 

To test the Indian talent and their skill capacities, you can work with Indian outsourcing companies, which will give a broad idea of whether the country has the required talent for your business and industry. It’s the easiest way to test Indian talent and their skills in handling your specific task. 

A major advantage of working with outsourcing agencies is that you have your tasks done without your active involvement in the execution or management of the outsourced team. The agencies execute the tasks on your behalf as they have expertise in the field.

However, working with outsourcing companies isn’t suitable for you if you want to build an independent team and form your own company in the country. Engaging with the outsourcing service will only help you acquire some knowledge about the Indian talent available for the required tasks. 

Test if you can recruit and manage your Indian team  

Suppose, you’ve now realized that India has the talents you’re looking for. Will this help you make informed decisions about company formation in India? The answer is no, not yet. You also must understand the best ways to recruit and manage your Indian team successfully. 

Here, EOR comes into the picture. EORs help you find a team of professionals who are not only capable of executing the assigned tasks but also fully aligned with the work culture and objectives of a business organization.

One significant advantage of working with an EOR is that you can strategically examine and test whether your team will succeed or not in running a company in the future. With the employer of record services, you will learn if your employees can be engaged and aligned with your organizational goals and values.   

Also, you have direct control and communication access with the team in the EOR services. While you’re focusing on productivity and business expansion, EOR ensures that the administrative burdens of your employees are taken care of. In short, the employer of record handles recruitment, HR functions, payroll processing, employee benefits, and compliance services to ensure employee work satisfaction and risk-free business operations. 

With the EOR’s assistance, you can hire, manage, and retain your remote employees. Talent retention plays a crucial role in the successful operation of a business, which is a key factor missing from outsourcing. 

Find your best way for company incorporation through Remunance’s guide

company formation

It’s a costly affair and a gruesome process to exit from business after having a physical entity in another country. Also, the chance of running a new company successfully in a foreign country can be minimal if you don’t have prior experience or understanding of the Indian work culture and workforce behavior. So, it would be wise to take the steps for offshore company incorporation after due calculation and take help from the local guide to minimize the risks involved. As a leading international PEO/EOR services provider in India, Remunance can be your local guide to ensure the best

and safest way for company incorporation.  With Remunance’s guide, you can completely understand the ground reality and experience the multifaceted nature of the Indian market to help you navigate your journey effectively. You can look at the complete journey of how the successful conversion of a few employees to a subsidiary happened due to its high scalability of business operations.

With Remunance’s assistance, you can find the best way to understand market behavior, people & culture, workforce strength, work environments, and government regulations in India. This way, we ensure effective management of your remote workforce and risk-free business operations. We help your business hit the ground running until you decide to form your subsidiary company. Also, Remunance helps expat support and build a new team under his/her leadership to ensure a successful subsidiary incorporation in India.

Disclaimer

This blog is made for information purposes. Everybody is requested to get advice from an expert before making a decision based on the information given in the blog. Remunance disclaims any liability/loss or damage caused by using the information, directly/indirectly, given in this blog.

Share
Book a Demo