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  There are several risks when it comes to starting a business. I have chosen India as the country where an organisation wants to do business. Starting a business in India It can take between one and four months to complete all the required procedures, with fees and add-on costs dependent on the size and type of business being registered. The law allows foreign citizens to become full-time directors or partners in the entity; however at least one of the Directors/Partners should be a resident of India. Shareholders and directors of the proposed new company need to get Permanent Identification Numbers (PAN) from the Income Tax Department; the directors have to apply for Director Identification  Number (DIN) for which documents executed outside India are required to be notarised and apostilled or consularised in the country of execution, which is one of the most stringent parts of the entire set up process. For foreign companies, the common risks of doing business can be divided into economic,  political, legal/regulatory, and business risks. While manyIndia watchers pay disproportionate attention to political and legal risks. There are certain political risks associated with organisations starting business in India    Legal/Regulatory Risks   Number Five on our list of common risks of doing business in India has to do with falling afoul of the law in India or in the home country. Many times this can be related to corruption such as the American Foreign Corrupt Practices Act or the Indian Integrity Pact for major defense purchases. The sixth common risk of doing business in India involves changing or unpredictable regulations. Arcane portions of the law can be dredged up by state or federal authorities to challenge a local or foreign company in an unexpected manner. This happens rarely but can form a significant setback. Vodafone, for example, was presented with a multi-billion dollar capital gains tax bill which they did not expect after they purchased cell phone assets in India via a Hong Kong transaction in 2008. Political Risks  India is a stable democracy so there is virtually no risk of the country failing. Even if the ruling party or leader changes, most business related laws and policies generally maintain continuity, especially since liberalization.  India has had armed conflict Pakistan and with China and there is always the small chance that hostilities to escalate again the future. Border disputes are not fully resolved between the countries.       Economic Risks   India has Asia’s oldest stock market and a fairly vigorous  regulatory system for equities and debt. The economic risks of doing business in India have more to do with inflation and with lack of fiscal discipline at the government level. Huge transfer payments to the rural poor, subsidies for food and fuel, and disproportionate raises for state employees and retirees have  bled the economy from time to time. Foreign companies need to watch exchange rate risks and interest rate risks carefully in India. Many other risks are specific to the company, the industry, the location and the state of the competition. It’s best to see bi -culturally savvy guidance to identify, manage and mitigate the risks of doing business in India.
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