Do I need to register a company for IT services?
1 Answer
You can receive remittance from USA as an individual as well as an organisation. As an organization the biggest advantage you will have is, you will be paying taxes after deducting your expenses. The tax will be on the profit you would be making.
As an individual you will have to pay the taxes on everything you will earn.
Moreover, having a company instills more confidence in the buyers. At the start of business when you have nothing, its mainly about the perception. The way people perceive you or your organization is the way people do business with you.
Having a company would help you employ people in future.
Do not worry, registering a company does not require much money. With 12-15k expense you can get a Pvt. Ltd. company registered in India. This cost can vary. As such cost by Govt is around 5k but there are various paper works, Memorandum of Association etc are to be drafted. CAs or Lawyers take their fee in the range of 7-10k to get the company registered.
Bottom line is - having a company is far more advantageous than working as an individual.
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Thanks Nitin for your quick response. actually I was confused about receiving payment from another country. Do I need to do anything extra apart from company registration? – Daniel 11 years ago
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Hi Daniel, you will have to get Import Export Code as well. This will be used while filing returns. You can get EEFC accounts opened with the banks for various currencies. EEFC accounts can hold you remittance coming in USD/GBP/YEN for 1 month. This way you can choose when the conversion ratios are in your favor to convert. You can do forward booking with the banks for particular currency. This is good time to forward book. Paypal would not give any such option. It would convert to INR and then only send to your acct. Generally Paypal sucks at the conversion rates it provides. – Nitin Srivastava 11 years ago
