India is going to be the home to the majority of successful startups in the years to come. There has been an exponential growth in the number of incubators, startup hubs, entrepreneurs, etc in recent years with government initiatives and projects like Make in India, Startup India, Digital India, and the establishment of Skill Development Centre are no less than blessings for startups.
Under the Startup India Scheme, the government has provided a particular checklist to accept a new venture as a startup. Read Eligibility of a New Venture as a Startup under Startup India Scheme for a detailed description.
A recent report by NASSCOM found that presently, India is the third-largest startup hub in the world. This emerging startup culture in the country is acting as a perfect catalyst in fuelling the Indian economy.
In the last five years, the economy witnessed a significant rise in the number of startups with over $6.4 billion investment into Indian startups in the first three quarters of the last year.
The exasperating startup show is a cultural shift inspiring the employees to think big, innovate quickly, and take all possible risks to capitalize on the market trends – an attitude completely alien to the Indian business community. This new psychology was born out of the new beliefs, hopes, and motivations of the new generation of millennial professionals but as a natural evolutionary process. Individuals of this generation are customarily a blend of optimism with goals and effective working rather than fitting into pre-designed molds by making compromises.
Following is a list of all the blessings for startups as provided by the Indian government:
1. Simple Startup Registration Process
The government of India has launched a website along with a mobile application for an easy and hassle-free registration for startups (company registration). The people interested in establishing a startup are just required a simple form on the website and upload certain documents. The complete registration is online.
2. Reduced Cost
The Indian Government has bestowed a list of patent and trademark consultants. These consultants provide high-quality Intellectual Property Rights Services at lower fees and faster examination. The government shall tote the entire consultancy fees but statutory fees have to be paid by the startup. With this policy, the startups will enjoy a reduction of 80% in the cost of patent & trademark filing.
3. Easily Accessible Funds
The government has set up Rs. 10,000 crore fund to provide funds to the startups as the venture capital. Alongside a guarantee is also given to the lenders to encourage banks and other financial institutions by the government for providing venture capital. This indeed is of the most crucial blessings for startups by the government.
4. 3 Years Tax Holiday
As a welcome maneuver, all the startups established under the Startup India Scheme have been exempted from tax for a span of three years required that they own certification from the Inter-Ministerial Board (IMB). Also, any investment made by the incubator and angel investor at a high value than the market price is exempted.
5. Eligible to Apply for Tenders
To instigate the startups, they are made eligible to apply for government tenders. Unlike normal companies, the startups are exempted from the “prior experience/turnover” criteria. This move is undertaken to counterbalance and provide equal opportunities to both startups and experienced entrepreneurs.
6. Facility to Choose Investors
After post introduction of this plan, the startups are provided with the benediction to choose their desired VC, giving them the independence to choose their investors.
7. Tax Savings for the Investors
To help startups attract more investors, the government has given tax exemption from capitals to people investing their capital gains in the venture funds set up by the government.
8. Time Saving Compliances
To save time and money, various compliance for the startups have been simplified. Startups are allowed to self-certify compliance through the Startup India Mobile Application with 9 labor laws and 3 environment laws. There will be no inspection conducted for three years in case of labor laws.
9. An incubator setup
The commencement of an incubator module supports the public-private partnership and lends the required support to startups to excel. Presently, 118 incubators are powering the ecosystem across the country altogether.
10. R&D Facilities
The New Action Plan also states the establishment of seven new Research Parks Modeled on the Research Park set up at IIT Madras. The Government has promised to set up the new Research Parks in institutes with an initial investment of about INR 100 Cr each. The proposed initiative would propel innovation through incubation and lead to joint Research and Development efforts between academia and the industry. The contemplated parks will be set up at IIT Guwahati, IIT Kanpur, IIT Hyderabad, IIT Kharagpur, IIT Delhi, IIT Gandhinagar, and IISc Bangalore.
11. Opportunity to Establish New Contacts
The Indian Government has planned to host two startup fests annually both at the national and international level to enable the various stakeholders of startups to meet. This will help the amateur startup stakeholders to establish new contacts and provide them with huge networking skills.
12. Easy Exit
A startup can easily close the business and exit the market within 90 days from the date of application of winding up.
If you want to apply for Private Limited Company Registration, you can go with Company Registration Online.
Private Limited Companies: A path to success for startups