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What are the Permits Required to Set up a Business in India?

Permits and Licenses

India is one of the fastest-growing economies in the world and is a hub for start-ups. Growing businesses in different sectors are contributing to the economic growth and development of India. To establish a business in India, several permits and licenses are mandated to legally operate a business. Each country has its laws prescribing permits and licenses. India has liberalized several laws in recent years, making it simpler for entrepreneurs to set up businesses in India. Many factors such as the number of employees, industry, type of business, location of the firm, etc affect the permit requirement differently.

Permits are important for carrying out any type of business in any sector or industry. A business that obtains all permits and licenses stays away from any kind of legal trouble. Permits guarantee that no one is harmed in any manner as a result of the business formation. Permits and licenses also ensure that the business is not involved in any illicit commercial operations and keeps a track of when and where is the business or trade being conducted. Thus, it is mandatory to obtain business registration in India for the benefit of the business entity. Further, the municipality or the state in which the business is carrying on its business requires the business to obtain several permits and licenses to grant approval for carrying on business in its locality or state. These permits and licenses allow the regulatory authorities to keep a check on the businesses to see if they are abiding by the law.

Eligibility criteria to obtain a business license in India

There are three eligibility criteria to fulfill in order to obtain permits and licenses for setting up a business in India. They are:

  1. The applicant should be at least 18 (eighteen) years old.
  2. The applicant should not have a criminal record.
  3. The business for which the license and permit are required should be lawful.

List of Business Licenses Required in India

The list of business permits and licenses required for setting up a business in India is as follows:

  1. Business registration
    The first step in setting up a business in India is to get a business registered based on the structure of the company. The different structures of businesses are Company, Limited Liability Partnership (LLP), One Person Company (OPC), Partnership, Private and Public Limited Company, Sole Proprietorship, etc. In India, business registration is mandatory for every type of business. For registration of a business entity, the regulations issued by the Ministry of Corporate Affairs have to be followed.
  2. PAN Card
    A PAN Card is mandatory for doing any business in India. Any person involved in the generation of income should whether in India or outside India, have a PAN Card irrespective of the fact whether the company is registered, has a permanent establishment, or only has an office in India. For obtaining PAN Cards for businesses or companies, an application under Form 49A has to be submitted on the portal of NSDL.
  3. GST Registration
    Every business and individual having an annual turnover of more than Rs. 20 lakhs in majority areas and an annual turnover of Rs. 10 lakhs in Special Category Provinces is mandated to obtain GST Registration. In addition to this, if anyone delivers a product for intra-state sale must also obtain GST Registration.
  4. Professional Tax Registration
    Every individual receiving income from the practice of a profession, occupation, or trade is subject to professional tax. Professional tax is a direct tax that is collected by the State Government or Union Territory. Obtaining Professional Tax Registration is mandatory within 30 days of employing staff in a business. For professionals, it is 30 days from the date of start of practice. An application for obtaining a registration certificate should be made to the assessing state tax department within 30 days from the date of employing staff for his business.
  5. Shop and Establishment License
    Licenses or registrations under the Shops and Establishment Act differ from state to state. Each state government has its own procedure for granting licenses and registration. So depending upon the State in which the business is situated, the appropriate State Public body should be contacted to obtain license under the Shop and Establishment Act.
  6. Trade License
    For carrying out business activities such as imports, exports and manufacturing, one must obtain a trade license. For obtaining a trade license one must submit an application and fulfill the prescribed conditions. The requirements and procedure for application can vary from state to state.
  7. FSSAI License for food business
    Food Safety and Standard Authority of India (FSSAI) is a government undertaking responsible for the safety and standardization of every food product sold in India. Every food business whether it is packaged food, restaurant, cloud kitchen or any other food processing model requires a license from FSSAI. License and registration under FSSAI are divided into three categories namely; FSSAI Central License, FSSAI State License, and FSSAI State Registration[1].
  8. NOC from Fire Department
    The Indian Fire Department issues a No Objection Certificate (NOC) to protect businesses from fire-related damages. The NOC is granted after evaluating the premises of the business, fire assistance and fire safety mechanisms. The evaluation findings help ensure that all fire safety requirements set forth by the Bureau of Indian Standards have been duly followed.
  9. Environmental Clearance
    The Schedule of EIA notification dated 14th September 2006 under the Environmental (Protection) Act, 1986 prescribes a list of project activities that have been mandated to obtain an Environmental Clearance Certificate (ECC). ECC must be obtained before initiating any project-related activities on the site.
  10. Import Export Code
    An Import Export Code is required to be obtained from the DGFT department for importing or exporting products or services from India. For obtaining an Import Export Code the business must have a PAN Card and a bank account.
  11. MSME Registration
    MSME Registration also known as Udyam Registration is a government registration that provides a certificate of recognition and a special identification number. Small businesses have to get their business registered in India under the MSME Act and the registration certifies the small, medium and macro-sized businesses.
  12. Trademark Registration
    A Trademark registered under the Trademarks Act of 1999 allows the owner of the trademark to enjoy sole ownership rights and forbids other parties from beneficially using the mark. In India, the Registration of a Trademark is necessary to safeguard the brand name. After the trademark application is approved, the owner can start using the “TM” symbol.


Every business irrespective of its structure requires certain permits and licenses from government agencies to register the business. Further, certain businesses are involved in managing and providing security and safety, financial services, broadcasting, Defence services, etc. They require permits and licenses from public agencies such as the RBI, IRDAI, Fire Station, Pollution Control Board, RTO and so on. Due to this, it becomes very important to determine and know the legal formalities associated with obtaining every business permits and licenses in India.

Read our Article: How to Start a Profitable Small Business in India

Ankita Tiwari

Ankita is an Advocate and has joined Enterslice as a Legal Researcher. Her work focuses on General Civil and Commercial laws, Corporate Taxation Laws, Labour and Employment Laws and Dispute Resolution. She is a law graduate from School of Law, University of Petroleum and Energy Studies. Prior to joining Enterslice, Ankita has the experience of practicing law in Delhi and Odisha.

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