What you need to know about company migration and corporate tax in India

What you need to know about company migration and corporate tax in India


Our goal is to understand company migration and corporate tax in India and answer some relevant questions. Migrating a company is what? What is the reason for companies migrating to India or from India to other countries? I have some other questions as well.

What is Company Migration?

A company migration occurs when a company or corporate organization shifts its base permanently from one place to another. As a result of the new policies, Indian companies are migrating.

These policies include ease of doing business and strict licensing rules from the union government, for example.

Even when their roots have already been established, corporate giants transfer their empires from one place to another. In addition to having fewer restrictions with less investment costs, such companies are always seeking a better business environment.

As a result of heavy duties pressure from the government, they prefer to shift to lower their tax expenses.

Migration of Companies to India

In 2021, many American big giants are likely to migrate their databases to India from China based on the global record and data provided by the Department for Promotion of Industry and Internal Trade (DPIIT). From the point of view of global experts, India is a less explored but highly potential market. Indian companies are also influenced by other leading international concerns and treaties.

As a possible reason for corporate migration to India, the following can be considered:

  • Labor at a reasonable price

We can better understand by using a simple example. In India, because manufacturing and working costs are lower, the average monthly wage is only $5,590 – $6,390, compared to $140 in X country.

  • Taxes on corporations

Corporate tax has been lowered from 30% to 22% in 2019, and new manufacturers’ tax has been lowered from 25% to 15%. South Asian countries have the lowest corporate tax rates.

  • India is one of the largest markets in the world

As the world’s largest population approaches, expanding their businesses for better growth seems like a golden dream.

The migration of Indian companies

Listed below are some of the reasons why corporations may be hesitant to move their established bases.

  1. Infrastructure is poor
  2. Doing business is easy
  3. There is corruption
  4. Inflation
  5. Issues related to politics
  6. Indigenization

Indian Corporate Taxes and Company Migration

Through an integrated study of corporate taxes in India and the migration of companies, a thorough understanding of various business procedures and policies is provided.  In addition, it includes the effectiveness of company licensing, inspections, and regulatory practices.

A corporation tax is a direct tax imposed on the net income or profit generated by a corporate entity, whether domestic or international.

There is a significant difference between corporate tax rates in domestic and foreign countries, which is the main reason for the corporate shift from India.



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