It costs more money to form a company in India
Ok, so it’s official; it costs more money to form a company in India. I’d get into more details later, but, to make a long story short, there is too much paperwork to be done to form a company in India and get various required approvals, permits and identification numbers. In principle, each of these doesn’t cost much. Especially to those who are from developed countries like US(?), UK, Germany, Japan, etc., the cost is small. However, …
1) You need to bribe a public official every time you file a paper.
2) You cannot do this on your own if you are not from India because you don’t really know how to bribe; you probably have to hire a consultant to assist you and that costs money.
2.1) The consultant does not charge $100.00 an hour, but even if he/she only asks one tenth of it, you need to ask him to spend many hours; this adds up over time.
2.2) To make a long story short, the whole process takes a long time, and thus, your consultant needs to spend many hours for you. The Indian consultant may charge only one tenth of what a typical commercial lawyer in US charges if you just look at two hourly rates; however, if the Indian consultant ends up spending twenty times as much time as the lawyer in US spends to get all paperwork done to form a company in US, then there is no difference between two total costs.
It literally takes 10 minuses to incorporate a C-Corporation in US. You should really take time to create various documents and you should ideally hire a commercial lawyer to create those documents for you, but you can really do this on your own; this is no rocket science. Forming a Private Limited Company (or Public Limited Company), which is the equivalent of C-Corporation in US, in India, is a different matter. While I understand that those who operate in India need to make adjustments, this is a very simple fact; it takes a much longer time to form a company in India than in US, and thus, it costs more money.
