🇮🇳 Annual Compliance — India

Incorporating without an Indian-resident director

Fix: At least one director must have stayed in India for a minimum of 182 days in the preceding calendar year. This is verified against DIN records. If no founder qualifies, appoint a local professional director — but document the arrangement carefully and ensure the nominee has limited operational authority.

Failing to file INC-20A within 180 days of incorporation

Fix: The declaration of commencement of business (Form INC-20A) must be filed within 180 days of incorporation, confirming that subscribers have paid the value of shares. Failure to file means the company cannot commence business, and the Registrar may initiate proceedings to strike off the company.

Underestimating GST compliance complexity

Fix: GST in India operates across four primary slabs (5%, 12%, 18%, 28%) with additional cess on some goods. Monthly or quarterly GST returns (GSTR-1, GSTR-3B) must be filed on time — late filing attracts INR 50/day (INR 20/day for nil returns). Input tax credit reconciliation (GSTR-2B matching) adds further complexity. Engage a qualified GST practitioner from day one.

Ignoring FEMA regulations for foreign investment

Fix: All foreign direct investment (FDI) in India is governed by FEMA and the FDI Policy. Share issuance to foreign investors must comply with pricing guidelines (not below fair value), reporting requirements (FC-GPR form within 30 days), and sectoral caps. Non-compliance with FEMA can result in penalties up to three times the amount involved. Engage a CA or CS specialising in FEMA compliance.