India is one of the fastest-growing economies in the world, backed by a vibrant startup ecosystem and a massive domestic market. Yet, for many founders, MSMEs, and foreign investors, doing business in India remains more complex than it needs to be.
Despite reforms such as Startup India, GST, Insolvency & Bankruptcy Code (IBC), Labour Codes, Jan Vishwas Act, and digital MCA/GST portals, India’s regulatory framework is still perceived as compliance-heavy, interpretation-driven, and enforcement-oriented.
To move from intent to impact, India can learn from jurisdictions that consistently rank high in ease of doing business — the USA, Singapore, and China. This article explores specific legal and regulatory changes India needs to create a truly business-friendly ecosystem.
1. Company Law & Business Incorporation Reforms
Challenges in India
- Multiple registrations across MCA, PAN, TAN, GST, Shops & Establishment, and labour departments
- Excessive reliance on professional certifications for routine filings
- Harsh penalties for procedural and technical defaults
Global Best Practices
USA (Delaware Model): Fast incorporation, minimal disclosures at entry stage, strong reliance on courts for governance rather than filings.
Singapore (ACRA): One-form, one-portal incorporation with statutory timelines and near-zero discretion.
What India Needs
- A single universal business ID valid across all Central and State authorities
- Replace upfront certifications with risk-based post-compliance audits
- Monetary penalties instead of criminal prosecution for technical lapses under the various Act/Law
2. Labour Law & Employment Regulation Simplification
Challenges in India
- Fragmented implementation of Labour Codes across States
- Multiple filings under EPF, ESIC, Professional Tax, and State labour laws
- Inspector-driven enforcement discouraging hiring
Global Best Practices
USA: Flexible hiring norms with disputes resolved primarily through courts.
Singapore: Employer-friendly hiring with employee protection through contracts and digital compliance.
What India Needs
- Uniform and complete implementation of Labour Codes
- Shift to risk-based, faceless inspections
- Decriminalisation of minor labour law defaults
3. Tax Laws & Compliance Predictability
Challenges in India
- Complex GST / Income Tax return structure and frequent amendments
- Repeated notices, audits, and interpretational disputes
- Uncertainty in tax positions impacting cash flows
Global Best Practices
USA: Advance rulings and predictable enforcement.
Singapore: Simple tax laws with binding circulars and guidance notes.
What India Needs
- Binding advance rulings under GST and Income Tax
- Clear exemptions and higher turnover thresholds for mandatory statutory and GST audits to reduce compliance burden on genuine businesses up to ₹10 crore turnover.
- Statutory limits on repeated audits and reassessments
- Accountability mechanisms for frivolous tax notices
4. Contract Enforcement & Dispute Resolution
Challenges in India
- Long litigation timelines
- Overburdened judiciary
- Weak contract enforcement
Global Best Practices
USA & Singapore: Dedicated commercial courts, strong arbitration culture, and strict procedural timelines.
What India Needs
- Commercial courts at district levels
- Mandatory pre-litigation mediation for business disputes
- Time-bound disposal of commercial cases
5. FEMA, FDI & Foreign Investment Reforms
Challenges in India
- Complex FEMA reporting
- Ambiguity in sectoral caps and pricing norms
- Fear of retrospective scrutiny
Global Best Practices
China: Negative-list-based Foreign Investment Law with default openness.
Singapore: Clear entry, repatriation, and exit norms.
What India Needs
- Shift to a negative list FDI regime
- Simplified FEMA reporting through auto-populated filings
- Statutory protection against retrospective enforcement
6. Exit Laws, Insolvency & Business Closure
Challenges in India
- Delays under IBC
- Difficult voluntary closure for small businesses
- Personal liability concerns for directors
Global Best Practices
USA: Fresh-start philosophy for failed entrepreneurs.
Singapore: Fast and predictable voluntary winding-up.
What India Needs
- Simplified strike-off and exit framework
- Time-bound liquidation and resolution processes
- Clear safe-harbour provisions for directors and founders
7. Regulatory Governance & Compliance Rationalisation
Challenges in India
- Overlapping Central and State laws
- No automatic repeal of obsolete regulations
Global Best Practices
Singapore: Mandatory Regulatory Impact Assessments and periodic law reviews.
What India Needs
- Sunset clauses for outdated laws
- Annual compliance rationalisation exercise
- A single, consolidated compliance calendar
Conclusion: Building a Confidence-Driven Business Environment
India does not lack ambition or entrepreneurship. What it needs is legal certainty, regulatory trust, and procedural simplicity.
True ease of doing business will come when: – Compliance becomes predictable – Enforcement becomes proportionate – Governance becomes digital and trust-based.
By adapting the efficiency of the USA, the clarity of Singapore, and the strategic openness of China, India can transform from a compliance-driven economy into a confidence-driven growth engine.
Running a startup or MSME in India should not mean running from one compliance to another.
At ComplianceDekho we help founders, startups, and businesses: – Simplify legal and regulatory compliances – Stay compliant without stress – Focus on growth while we handle the law
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