Economy, Syndicate

Doing business in Tamilnadu, India

Recently I received a report on the vision of Tamilnadu Government for how the business climate should be in year 2025 in the state. The report was a joint work by CII (Confederation of Indian Industries) and Tamilnadu Government (TN Gov). 

tamilnadu-state-industry-in

I saw one interesting statistics that stood out among the report’s many pages. It was the number of days it takes to start a business in Tamilnadu (to a large extend it is same across India) – it is currently a whooping "41" days. I was not surprised, since I run my own business for last 10 years and have been through these hurdles of bureaucracy many times.

Most recently I had to do this (starting a business) once more, this time for my family business and it took me nearly 5 to 6 weeks. At this time we still we have VAT registration pending. To be fair, few days out of this was due to my end delays as well.

  1. We started with registering the new "Private Limited" (Limited Liability Company)  with Registrar of Companies (RoC). For this the first step is to get name clearance (name of the company shouldn’t be conflicting with the said/unsaid guidelines or with other existing businesses). This took some time.
  2. Then comes the actual registration which involved multiple iterations of submission of our MoA and AoA (Memorandum of Articles and Article of Association). Each time we had to take a print, sign the paper, scan it, then digitally sign it and then upload it as a PDF file to the site. Once approved, you need to follow this by a hard-copy submission(sometimes they may ask for the hard-copy for each iteration as well) of the documents.  Once this is done.
  3. First board meeting and resolutions to be passed
  4. Followed by getting an Income Tax PAN Number
  5. Then comes opening of a Bank Account
  6. Then comes applying for Service Tax Number or TIN (Tamilnadu VAT Number) and CST (Central Sales Tax). The choice between Service Tax and Sales Tax registration is depending on the nature of your business.

After all this only you can start your functioning. There will be more steps if you are involved in manufacturing, which depending on the industry has various other registration formalities. Compare all this is the time it took to open a business in USA – we opened our 100% subsidiary sitting from India in less than few days through the help of a CPA locally in India – everything happened through online. I remember reading that New Zealand, Canada and Australia with USA tops for the shortest days required to open a business. For information on doing businesses around the world, see this world bank funded site.

With the above experience I should say it is definitely commendable of Tamilnadu Government to even dream a "2" day timescale for this by 2025.

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80 thoughts on “Doing business in Tamilnadu, India

  1. Babu N says:

    Hi Venkat,

    Felt lucky to read your blog. Am Babu N working in a private industry and wish to start a business shortly. It is a product manufactured in Coimbatore and we planning to start an outlet for it in Chennai. It is purely an eatable one. Now we are in searching for a shop in good location around chennai. Can you please guide us like how we should market it. Its a very high quality product and famous one in Coimbatore. Each coimbatore people knows it and in fact i am the regular customer for it from my childhood. So the strategy behind it is we need to make the people to taste it once. If anyone had it once for sure they will become our regular customer. What kind of marketing strategy we need to follow to promote our product?? Please post back your valuable tips for us..

    Thanks in advance.

    Regards,
    Babu N

  2. p.srinivasan says:

    sir I am srinivasan Now I am Running one company 15 years. now my work powder coating and spary painting. give me any idea for my improvement.

  3. Vinoth says:

    Hi Sir;
    I am Vinoth,working as a Electronics service engineer.I want to start a hardware course and service center.what are the procedures are there to start this business.please guide me.

  4. srijith says:

    sir i am srijith . i am student of BE-MECHANICAL FINAL YR . i am not intrested in my engineering field . i want to do business like real estate , export vegetables & animals breeds, agriculture like that field only .. i thought that i am not completing my BE courses. i have lot of arrears . but i am a self confident person . i can sign in my business. so you give a better idea for my feature .
    thank you…

    • Hi Srijith, the three businesses you are mentioning are all businesses with good potential and long term potential. I can understand your frustration on your studies and arrears. For all three businesses you need technology to innovate and to do that you need to invest in engineering. For that you need to lead a strong engineering talent and people. It will greatly help in you to lead them if you have a good degree. In future for you to raise money as well your degree will give you the credentials. Push yourself and get the degree. Its not difficult to clear the arrears. All the best.

  5. SKumar says:

    Hello Venkat,

    Recently we have decided to start a small manufacturing plant in Covai area. Seen your blog and found lot of interesting information.
    Since our plans are in the initial stages, we are talking to lot of people to get information.

    You had listed few steps in registration process and other actions – which all takes about 4 to 8 weeks.
    Do you have a kind of guidelines or detail steps to consider while starting a business. This will help to minimize the iterations, also be aware ahead in time of what is required at what stage especially while coordinating with various agencies of the government.

    Appreciate if some references are provided.

    Thanks a lot for your help.

    Best Regards

    • Glad to hear on your startup. All the best for success.

      I don’t have any readymade list. I will suggest best route will be for you to consult a local agency of repute who can guide you on these, you should be able to easily identify one through industry bodies in Kovai like CII or Rotary clubs. Another source will be to get the help of a local Chartered Accountant (Auditors), local forum of http://www.icai.org/ should be able to help you in identifying one.

  6. Deva says:

    Dear Sir,

    I would like to start a Electronic and home appliances shop in tirunelveli area. Please advise me how much will be the investment and how to get products from distributors.

    Thank you,
    Deva

  7. Sharanyaa says:

    Hi Venkat,
    I am currently working as an end – end – recruiter in a concern,but however my passion is always towards cooking,Is there any blog or sites that could give me brief insights on how to start working it out.

    Thanks in advance
    Regards,
    Sharanyaa.

  8. K.Venkatesan says:

    sir iam venkatesan from Srirangam Trichy . I want to start to new manufacturer business , But i need small investment only. So please given in new ideas to expect thanking you

  9. RAJASEKARAN C says:

    Dear sir,

    i am forty years old .my education is DME., BBA., i am working past 20 years. selling of tata buses , target vs achievement of automobile dealer job is very torture.

    i want to start business with 25000 to 30000 monthly income with peaceful life. my interest field is purchase agri products like vegetables from one place and selling large quantity i.e brokarage business. second one interest is export our agri products, mooligai,spices etc., to various countries.

    kindly advise me

    1.how to do brokarage business of vegetables
    2.how to export business can do, is there any governemnt training centre is there

    thanks and regards
    c.rajasekaran

  10. priya says:

    hi i am completed BE., i need some small business idea . it is relevant to my profession., or education oriented

  11. Nithya says:

    sir,am a divorced woman,with no alimony and have started a home business of selling sarees and dress materials .We are from Hosur ,Tamilnadu. The income is below 2.50lac per annum. Kindly guide me how to register the business and what needs to be done if I can improve it online shop.How to get govt subsidy if any. how to and under what name should i open banck account etc,
    please guide me sir, it would be of great help for me.
    thank you
    Nithya
    Hosur
    Tamilnadu

    • Nithya,
      Glad to hear your are doing something on your own, all the best. even the biggest successful businesses started small. If you like reading books try these two books – one called “Made in America” by Sam Walton which is on the path of world’s largest supermarket Walmart. Second book “It happened in India” is closer home by Kishore Biyani on Big Bazaar.

      Till the business grows to size I don’t see a need for you to register the business. You can stay as a proprietorship firm itself. This will keep the government/tax paperwork to the minimum. Ask advice on these with a local chartered accountant or Commerce Student. For more help contact local Women Self Empowerment chapter or local Rotary/Lions club.

      For opening a bank account, which is a good idea, do it in your own name. Easiest option. I will suggest you open the account with the nearest branch of any public sector or cooperative bank. You will also want to file Income Tax returns every year, so that when you want to expand your business you have a financial history and credibility.

      Once again, all the best.

  12. பாலச்சந்தர் says:

    நண்பர்களே ‘உண்மையாக’ (hard to say ….really) நீங்கள் தொழில். செய்ய. விரும்பினால் .என்ன தொழில் செய்வது என கேட்காதீர்கள்.அதை நீஙகள் தான் முடிவு செய்ய வேண்டும் .முடிவு எடுக்க குழப்பமா ..நான் ஒரு சிம்பிள். ஐடியா சொலலட்டுமா
    உங்களுக்கு பிடித்த,உங்கள் உள் மனம் எப்பொழுதும் சிந்திக்கும் விசயம் ,நீங்களே field la இறங்கி செய்யும் வேலை எதை சார்ந்தது அதனை தொழிலாக. முடிவு செய்க.அதில்தான். நீங்கள் வெற்றி பெற முடியும்
    வாழ்த்துக்கள்

  13. Rajesh K says:

    I am a assistant professor i did complete ME .
    Now i Want start a business in Erode or Coimbatore area
    will you please give me an idea for which business suitable for the above mentioned areas and minimum 2 laksh investment.

  14. S.Kavitha says:

    Hi Sir,

    Greetings from Salem, Tamil Nadu.

    I’m a working women for an automobile dealer in customer care. Now, iam having some plans to do some business from home. So, please suggest me some ideas for the same.

    Regards,
    S.Kavitha

  15. Dinesh says:

    Hi Sir,
    I’m a B.E Graduate in Computer Science and working as a Software Engineer for past two years in Coimbatore. Now I have an Idea a new business(Except software and Computer related business) in the anyone of the area like Coimbatore, Tiruppur and Erode. Please suggest me a some ideas to start it will really helpful for me.

  16. senthilkumar P says:

    sir
    I am senthilkumar from salem ( tamilnadu ) and i m planning to
    start corn /maize powder manufacturing new unit in my place.
    so I need some information regarding the plant and prospects in
    India. so i need some help from u for about the project.
    so if you r interested to help me
    pls give me your suggestion from u ,
    because i am 37 years old, post graduate and unemployed
    and in our surrounding area have lot of maize growth
    so i want start an agricultural oriented product business
    because i am having a small flour mill and rice mill and
    6500 sqr feet gudown and 75 HP power supply
    so pls give some guidance and idea for me .

    thank u
    Senthil

    [Blog Author: Contact details including mobile number removed]

    • G. Jambulingam says:

      Dear Senthil

      As of my knowledge you can check with Agriculture university in Kovai about plant and prospects, even some team working kovai Agri university and they are making own food brands and its selling in local market. Please contact like that people

      Hope it will helpfull

      All the best

      Regards
      G. Jambulingam

  17. sashiprasad says:

    Sir
    Are there any consultancies that help in getting the necessary legal processes like registering, getting NOC’s from pollution control board etc in Tamilnadu. I have business idea in mind but the start procedure is mind boggling.

    thank you

  18. vivekanandan says:

    sir,
    i have finished MBA [Hr and Marketing] in 2013 batch now i’m planning to start a new business
    (small scale business) through bank loan. pl. give me ideas how to start? what all are the formalities and which business i can choose in coimbatore city, tamil nadu .

    Thanks & Regards,
    R.vivekanandan
    Contact:
    coimbatore.

  19. radha.p says:

    Sir, iam working as a teacher in a matriculation school having 18 yrs of experience. my qualification is M.A.,M.Ed.,M.Phil., .But now iam totally not interested in teaching areas, i got opportunity for the administration level in schools but then i was not satisfied with certain things. Now my very humble request is as iam not having any experience in business, what kind of business can i take up. iam very fluent in english tamil and hindi. pls suggest with low investment or as a working partner in madurai.

  20. mohamed yunus says:

    dear sir,,

    now i am working in kuwait.i wanted to start a small scale business or own sole business. can u please tell me ideas for start or own a business in tamilnadu. i am from kumbakonam in india.pls advice the rate of strat a business. awaiting for your reply.

    thanks ,

    yunus. kuwait

  21. satheeshkumar says:

    I’m a civil engineer and I’ve been working for various construction companies. I want to start a ready mix concrete business in , Tamilnadu,India.

    Kindly give your valuable suggestion,
    1.It will cover under small scale business?
    2.Can i get any subsidies?

    Thanks & Regards,
    Satheeshkumar

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