How to Start a Software Company in India

Previously, software companies in India mainly included subsidiaries of multinational organizations. Startup software organizations in the country followed the growth of the IT industry. Entrepreneurs and institutions seeking to start a software company in India need to follow several requirements and procedures, which are dictated by India's enterprise regulations, including provisions on business endeavors within the IT sector. Other requirements may depend on the business' scale and range of services.

Step 1
Write a business plan. A business plan for a software company must contain a description of the technology and expertise your company is going to use to develop the software. Provide a detailed description of your niche market, since the type of software you develop is directly related to your clients. For example, if you choose to develop software for medical use, your market is the medical field, and you must provide a description of this industry as well as of other companies producing similar software.

Step 2
Choose your business organization or structure. According to the information provided by India's government website, if your company requires employees with specific skills and technical knowledge, the best structure for your business may be a partnership. However, the size of your software company and whether you intend to provide services nationwide, or only to your local community, are two factors that affect the type of organization you choose. If you choose to focus on the mobile software industry, your best option is probably to focus on a national market. In this case, a limited company structure is probably the best fit for your business.

Related Reading: The Average Time to Reach Profitability in a Start Up Company

Step 3
Select the region in India on which you desire to focus. You may still choose to sell your software products nationwide, but depending on the type of software you develop, you may find it beneficial to focus on various high-density areas. For example, if you plan on developing and selling software to the pharmaceutical industry, you should concentrate your business deals in the western side of the country. According to, this industry has a higher concentration in this area.

Step 4
Register your software company with the Registrar of Companies (ROC). To do so, you must provide four different names for your company that are not already in existence. You must also create a Memorandum and Articles of Association, which is the constitution of your company. Fill out the Declaration of Compliance, Notice of the Situation of the Registered Office of the Company and Particulars of the Director, Manager or Secretary forms. You can find these forms in the Indian government website. To fill out these forms, you need to provide basic information about your software company, your personal information and your manager's or director's personal information. Registration fees are 1,000 Indian rupees, or about $23, on average.

Step 5
Choose the place in which you intend to start your software company. Consider the size of your company, the number of employees and technology available in the area. One advantage of running a software company is that things like research and development, manufacturing, and storage are often non-issues. You may start with a small office with enough space to place a couple of computers for your employees, and then transfer to a bigger office as your company starts making a profit.

Step 6
Hire competent staff. A software company is a specialized type of business that requires you to employ individuals with high technological skills, higher education and knowledge of software development. Hire two or three software engineers, plus one or two computer programming professionals with an associate's degree to start. You can hire a higher number of specialized employees as your company grows. If you choose to focus on a specific industry, such as the medical industry, make sure you hire software engineers with experience in developing medical software.

Step 7
Register as an employer with the state or region Department of Employment in India. Kerala, Jammu and Kashmir, Maharashtra and Tamil Nadu are the four states that provide online registration. Registering at the Department of Employment in one state allows you to post job ads and look for suitable candidates in India for the open positions you have in your company.

Step 8
Register with Software Technology Parks India or STPI. While registration depends on the preferences of the organization, a company that belongs to STPI can receive benefits, such as tax breaks. Submit a statement of your project, source of funding, business plan with a thorough draft of the marketing strategy and a financial plan detailing projections for up to five years.