How to open a cafe in india

Hi,

I would like to open a small business in Manali. Does anyone know if there is a legal way of doing this? Are there many problems with locals?
I just started my research so any thoughts or informations would useful.

michalowskiego

I am thinking of the same thing but in another part of India - still also in early research stages. For me the biggest challenge seems to be how to get a visa that allows you to stay here for long enough and to do it legally. What kind of visa are you on?

The short answer is that it's not easy for foreigners to start a business in India.

Search the site on 'starting business' or similar for loads of info.

Is there a visa for foreigners to set up a business(not the MNC kind but smaller enterprise) in India?.

You have either Business or Employment visa options. The former is likely your best bet.

The best single document explaining them is likely the FAQ.

As per the following, the document is pretty much ruling out small businesses for the issue of business visa,

- The foreign national should not be visiting India for the business of money lending or for running a petty business or petty trade.

- The gross sales/turnover from the business activities, for which the foreigner has been granted visa, is not less than Rs.1 crore per annum (to be achieved within 2 years of setting up the business).

Unless someone is planning to set up an expensive cafe/restaurant which can yield a turnover of INR one crore with in 2 years of starting it, business visa is not the option.

Hi, sorry i know this thread is a bit old but i have the same question as the poster.....I'd love to find out if someone has started a business/cafe in India and what requirements were needed. regarding the 1crore turnover, I feel its a high figure especially if you would have a cafe at a beach or similar but i might be wrong? How would you apply for an employment visa if you are starting a business with an Indian partner?

Either way, if anyone has any useful information that would be a huge thanks from me!
Love

1 crore/annum (about 145k EUR at the current rate) would indeed be a high initial turnover for a beach café, but this is of course exactly what the Indian government intends with its policy: they do not need nor want foreigners setting up small businesses here and competing with locals. Only if you bring in higher amounts/set up a production unit and employ people are you wanted here. In itself I think it's a sound policy, only wish we in Europe would do the same.

You can set up a company with a local partner and become a director in it, which would result in a business visa. But keep in mind that with a business visa I believe the maximum period of stay would be 6 months and it doesn't allow you to be employed (at least that's my reading of the law but I hasten to add that this is not my field of expertise).

Or you could seek employment in a locally established company, possibly one in which you're also a director, but that would mean first getting a business visa, then leaving the country to get an employment visa as the business visa cannot be converted. If you qualify as an 'ethnic cook' then the 25k USD/year minimum income level can be waived.

Be very careful when setting up something with a local partner: it can work out well but know that many people have lost lots of money this way and when things head south you will have little to no legal recourse in India.

That being said, I do know some foreigners who set u businesses here in India -some of them also active on IM- and it would really surprise me if they realized a >1 crore Rs annual turnover yet they've been here for years. Hopefully some of them will chime in.

A more fundamental question needs to be asked; Have you run a similar cafe /restaurant business in your own country ? This should be a litmus test of one's seriousness in starting a business enterprise.

If One in three restaurants in NYC close down in their first year of business; what is the % of restaurants that survive in India ?

If the intent of starting a small mom&pop scale business in India is to live there extendedly; I'd suggest looking for other options, or; buy a successful business and see how far you can run with it.

Yes NYC there is a lot of these build it and they will come fantasists in India.

In Goa especially.

Goes without saying, but I'm not my brother's keeper. The hospitality business is darwinian, I assumed the OP knew all about that. But I concur about the opening a business to live here: if that's your objective then don't do it, it will lead to grief.

that's what is confusing to me!

when I was in Kerala I met a Swiss ex-pat who has lived in Kerala for years on a business visa. She rents a decent house, does energy healing, caters a few parties for westerners. No way would she make a crore doing what she does. She draws a pension which helps her pay the rent.

She told me if I wanted to stay in India for a while, to "just" get a business visa! She blithely told me to put anything (i.e., business wise) down on the application because no one ever checks anyway!

So it surprised me she is able to have lived in India for at least 7 years after I checked the requirements (for US citizens) for a business visa and one can only stay 6 months, just like with a tourist visa. She does go back and forth to Europe, but for the most part, lives in India.

it's all very confusing to me!

I don't think the business visa rules have always demanded you need to have a 1 crore return so maybe she just has a visa based on her ongoing business.

But I think it's fantasy to suggest no one checks business visa applications these days

What I think but don't know for sure is that the rules -or at least their application- have drastically changed over the past 4-5 years and what once was easy isn't anymore. I think anyone opening a business should do so with the intention of actually running and developing it, not as a smokescreen to enable them to stay here, thereby putting themselves at the mercy of any bureaucrat who decides to crack down or squeeze money out of them.

I met a lady from Europe she lives in India for the last 35 years, and she told me the visa is really turning into a problem for the last few years. Previously it was easier, or so I was told.