An In-Depth Guide to Start a FinTech Startup in India

Start a FinTech Startup in India

Trading cryptocurrencies and investing in companies can take place within the boundaries of one platform, and all this can be attributed to the wonders of financial technology (FinTech). Yet, these undertakings are only plausible through the offerings of fintech companies that were once startups. The need to extend the existence of such startups is on an exponential rise, with India anticipated to be one of the most capable fintech scenes in the upcoming years. Making the first step to start a fintech startup in India demands a high level of planning and management control. So, what are the requirements to start a fintech startup in India?

The era of rapid digital transformation has changed the dynamics of how we conduct our day-to-day activities as people worldwide try to handle everything from the comfort of their devices, including their finances. Nowadays, controlling our finances has exceeded standard limitations and reached what one would’ve thought impossible a decade ago.

How to Start a Fintech Company in India: The Six Bases

Each year, the global fintech market is extending its offerings, from solutions, unique models that help assess risks, leveraging big data, machine learning implementation to evaluate masses of data sets, and much more. The existence of this financial sector is expected to reach a colossal revenue margin of almost $188 billion by 2024, as the COVID-19 pandemic shifted the attention toward digital means of conducting financial activities.

From there, we can acknowledge the global enthusiasm and investments directed toward this sector. So, those considering launching their own business endeavor in the financial technology scene acknowledge the role fintech will play in shaping the economic framework of global sectors. But before reaching the point where being successfully welcomed into the ubiquitous finance world, they must first concede to the six legal bases when planning to enter the Indian financial ecosystem.

Finding the Right Business Model

When forming an appropriate business model for a fintech startup in India, first, you must have a comprehensive understanding of the legal aspect of launching your financial venture. And finding a suitable business model is the setting stone that will embark you on your journey into this newly risen digital world. Such business models can be classified into three types: one-person company (OPC), limited liability partnership (LLP), and private limited company (PLC).

1. One-Person Company (OPC)

First introduced in India in the Company’s Act 2013, the OPC is a company set by one person and one person only. Before establishing the act, one person did not have the authority to establish his own company in India. It is the integration of solitary proprietorship where the establishment can rightfully be directed by one individual and holds the functionalities of a full-fledged company.

2. Limited Liability Partnership (LLP)

The LLP business structure delivers the best of both worlds: the advantages of limited liability of an establishment and the flexibility of a partnership. It holds the characteristics of a partnership and a company and was first introduced in India in 2018. The LLP Act states that a minimum of two partners are obliged to integrate an LLP into their business structure, no matter the number of partners. Even if it exceeds two partners, two of them should be the designated managing partners, with at least one of them having to be a permanent resident in India, with the liability of each one confined to the support and role made by them.

3. Private Limited Company

The PLC business structure is directed at companies established privately for small businesses, with its members’ liability confined within the limitations of the amounts of shares held by these members. If the company could be exposed to certain losses, its shareholders are the party to be held liable for such losses. They could be forced to sell their assets in the company to submit as payment to save the company from what could be the certainty of bankruptcy.

Register for GST

One of the fintech startup requirements in India is the registration of a Goods and Services Tax (GST), and in the case of any financial business, this is a must-do. Once the registration is fulfilled, the company must obtain a six-digit Goods and Services Tax Identification Number (GSTIN). A GST plays the role of a Tax Identification Number (TIN) which permits governmental authorities to register the company within the VAT system.

Nowadays, the GST system is being heavily harnessed by fintech companies due to its substantial generation of enormous masses of data on consumer payments and sales. This factor helps fintech startups and established companies alike identify trends and insights that deliver better financial products.

Get Legal Contracts and Agreements

When starting a fintech company, one of the most vital things to take into consideration is tackling and tracking legal documents, and throughout this part, having a startup lawyer on your side is a must to help navigate through the legal technicalities to those of you thinking to start a fintech startup in India. Structuring legal documents in compliance with governmental demands is indispensable. Some of these requirements are:

  • Co-Founders Agreement: a contract between Co-Founders specifying the ownership of the company, initial capital contribution, duties, and responsibilities of each co-founder.
  • Intellectual Property Licensing Agreement: under this agreement, the fintech startups will have the authority to unwaveringly transfer all, or even a portion, of the company’s intellectual property rights to an assigned party. This can only happen in exchange for a certain sum of money.
  • Privacy Policy: it introduces essential privacy and data protection standards enforced by India’s Information Technology Act. The fintech startup and its website must adhere to specific security measures when managing sensitive data for customers and users. 
  • Terms of use for mobile app users: it covers proper usage of the startup’s application, prohibited activities, limitation of liability and warranty disclaimers, account termination, and protection of intellectual property.
  • Vendor Agreement: legal documentation is determined under the Indian Contract Act. It establishes the ground rules for the quality of services provided, cost, liability, and duration, alongside various other conditions to be completed by the company.
  • Product development Agreement: it covers confidentiality, hiring process, and past and future ownership.
  • Employment Agreements: these stipulate the agreed-upon terms of employment between the employee and the employer. It lays down guidelines that both parties must respect the duty of mutual confidence and trust when making reasonable and lawful requirements from each other.

Intellectual Property

Trademark, Copyright, Patent, and Design are examples of intellectual property. A finance company in India, such as fintech, must safeguard its brand name, tagline, website, mobile app, and other assets. All of these can be safeguarded by registering them and securing Intellectual Property Rights (IPR).


The type of service a financial startup aims to provide determines its license and regulation. The following services can be provided by a fintech startup:

  • Payment services
  • Peer-to-Peer (P2P) services
  • Retail service providers
  • Financial management/investment

Register Domain

For any technology company, having a strong internet presence is a necessity. In a fintech startup’s case, it is the fuel that energizes the company’s online presence, therefore, having the right domain name and a properly developed website is the main aspect that defines the company’s groundwork in terms of online finances.


Currently, the presence of fintech companies in India is rising, and it is expected to reach phenomenal growth in the years to come. Startups specializing in digital payments, lending, and wealth segments are blessed with the Indian government’s support. It aims to increase the country’s financial inclusion by supporting new bank account enrollment of recipients for explicit gratuities by transferring and providing accessibility to one host of financial services applications.

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