Frequently Asked Questions

Frequently Asked Questions

INDIA RANKS AMONG THE MOST PROMISING MARKETS FOR THE DIRECT SELLING INDUSTRY. IT HAS ALL THE INGREDIENTS THAT DRIVE DIRECT SELLING

India’s millennial population of 400 million is the largest in the world and is armed with around $180 billion in spending power and, with the smartphone adaption and widespread availability of mobile broad band infrastructure, it will become a disruptive force faster than most businesses expect.
Millions of women looking out for business opportunity that offers income, recognition and above all a sense of individual identity.
Millions of educated unemployed/under-employed young people who are entrepreneurially inclined.
Nutritional supplements, beauty and personal care products have been registering YOY double digit growth.
Growing economy with strong macro-economic indicators, supported by high local consumption.
Stable, democratically elected government which encourages entry of international corporations.
Low penetration of organized retail.

A number of major international direct selling companies have still not decided about establishing business in India.

We have answers to the questions which can take them one step closer to the decision. These questions could be.

Corporate Structure and Regulatory

  • Can an international company establish direct selling business in India without any government approval?
  • What are the requirements for setting up a corporate entity in India and how long does it take?
  • What are the available corporate structure options?
  • Are there any restrictions or limitations on foreign equity or ownership of a direct selling company doing business in India?
  • Are there any specific “MLM”, “direct selling” or “anti-pyramid” laws or regulations in effect in India?
  • Is there a minimum capitalization requirement for a foreign direct selling company in India?
  • Are there any restrictions/limitations on repatriation of paid-in-capital and/or revenue?
  • Are any directors or officers required to be nationals of/or residents of India?
  • Are there any special registration requirements for a direct sales/multi-level marketing company?

Distributors / Commission

  • Is there a cap on quantum/percentage of network commission payout?
  • Are distributors deemed to be independent contractors under the law?
  • Can they claim to be employees of the company?
  • Can distributors from other countries enter India to sponsor locals?
  • Similarly, can Indian distributors go to foreign countries and sponsor there?
  • Are distributors required to be registered with the government?

Products

  • Are there any product registration requirements for selling nutritional supplements, beauty products or personal care products?
  • What is the time-frame for product registration? Are there any restrictions on importation of products in India?
  • Are there any requirements for local manufacturing of products?

Taxation

  • What are the sensitivities around transfer pricing?
  • What are the corporate income tax rates?
  • What are the customs duty rates for import of beauty, personal care and nutritional products?

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