Foreign professionals will be able to set up operations in India more easily once the Limited Liability Partnership (LLP) Bill is passed by Parliament. “Two directors of any limited liability partnership have to be based in India, of which one has to be based in India for more than six months.
Otherwise, any professional can become a partner from anywhere in the world,” said minister for company affairs Prem Chand Gupta. The removal of the 20-partner limit will also make it easier for multi-disciplinary foreign firms in legal and accounting services to set up operations in India. The government expects the LLP Bill to be passed by the Winter Session of Parliament this year.
This will clear a major hurdle in what is likely to be a key issue for discussions at a high-level trade visit from UK to India this week. In case of professional services, the minister clarified that as per India’s stand at the WTO on reciprocal arrangements for recognising professionals with individual countries, auditors and lawyers still have some way to go before being allowed to practise in India. A long-standing issue on the agenda is to open accounting and legal services in India to UK firms.
Mr Gupta was in London to meet professionals and his counterparts in the UK government on the eve of the departure of the UK’s largest-ever trade delegation to India. The message he was conveying is that India is not only open for business, but the government is also fast cutting out the red tape. “We were, what, 76 in rank as an easy place to do business last year, but we will improve that ranking by the end of this year,” he said.
Another big grouse of foreign investors about delays in paperwork for setting up companies has already been taken care of, Mr Gupta assured. “You can set up a company in 3 to 4 days through the e-governance project (MCA21).
You can download all documents as well as make payments online,” he said. He said, India's e-governance project, with mandatory online filing, on which the government has spent Rs 350 crore, is now at par with the best in the world. “My counterpart in the UK government said this system is more advanced than the one currently operating in the UK,” he told ET.
Among other reforms, he pointed out a comprehensive revision of the Companies Act will be introduced in the budget session, and the government hopes to have it passed in the monsoon session. “The new Companies Act will be slim, comparable with the best in the world,” he said. “In fact, it will be slimmer than the UK Companies Act I'm told,” he added.
The CA Act for chartered accountants, company secretaries, and cost accountants has already been amended, he told local professionals here, and a statute has been passed to accede to a long-standing demand from professionals to allow multi-disciplinary firms.Mr Gupta pointed out that when it comes to skill and talent, Indians can hold their own anywhere in the world, and Indian accountants and professional service providers should be confident to go out and take on competition globally.