Company Registration for NRIs and Foreign Nationals in India

Private Limited Company is considered to be the most ideal form of business for NRIs, foreign nationals and for foreign entities who want to set up business in India.

According to FEMA guidelines, Foreign Direct Investment (FDI) is not allowed in other types of businesses like Proprietorship, Partnership Firm and One Person Company. Though investment in LLP’s is allowed, but it requires prior approval of the RBI.

Subject to FDI norms, the shares of an Indian Company can be held by a NRI, Foreign National or Foreign Company. Therefore, Incorporation of a Private Limited Company is recommended for foreign nationals as it is the fastest and easiest way to enter into the Indian Market.

In this article, we focus on the requirements, conditions and procedure for setting up a Private Limited Company in India with NRI’s and Foreign Nationals:

Minimum Directors:

For the purpose of incorporating a Private Limited Company in India, there should be atleast two directors, out of which one director should be mandatorily a “Resident of India” (ie, a person who has stayed in India for more than 182 days in the previous year).

The requirement of one Resident Indian Director has to be fulfilled throughout the existence of the Private Limited Company. Therefore, the directors can be a combination of resident and non-resident individuals

Minimum Shareholders:

A Private Limited Company can be set up with minimum two shareholders. The shareholders can be a combination of foreign nationals, non-residents individuals or other entities. There is no condition regarding the residential status for shareholders. The directors can also be the shareholders of the company.

Process of Incorporation:

– Obtain DSC (Digital Signature Certificate)

– Obtain DIN (Directors Indentfication Number)

– MoA & AoA, SPICe INC-32 Filing

– PAN/TAN Applications

The directors should apply for DSCs for signing e-forms and DIN (to be appointed as directors) before proceeding with the process of incorporation.

Documents required for obtaining DSC and DIN:

The primary documents required for obtaining the DIN and DSC are the applicants photograph, Proof of Identity and Proof of Address. The details are listed below:

For Foreign Nationals residing in their home country – Proof of Identity (passport mandatory) – Copy of Driving License, Bank Statement or any utility bill (not older than two months) – Passport size photograph All the above documents should be notarized by a Public Notary in the country of residence and be consuralized or apostilled by the competent authority in the country of residence. (depending on the country where the citizen belongs to).

For Foreign Nationals residing in another foreign country:

– Proof of Identity (passport mandatory)

– Copy of Driving License, Bank Statement or any utility bill in the country of residence (not older than two months)

– Copy of Visa

– Passport size photograph.

All the above documents should be notarized by a Public Notary in the country of residence and be consuralized by the Embassy of the Foreign National’s home country in the country of residence.

For Foreign residents residing in India:

– Resident Permit

– Copy of Passport

– Copy of Visa

– Copy of Bank Statement or any utility bill (not older than two months)

– Passport size photograph.

All the above documents should be attested by consulate of the Foreign Embassy in India.

For Non-resident Indians:

– Proof of Identity

– PAN Card

– Copy of Aadhaar Card, Driving License, Voter ID Card, if any

– Current Address proof such as Copy of Driving License, Bank Statement or any utility bill in the country of residence (not older than two months)

– Passport size photograph.

Current Address proof should be notarized by Public Notary in the country of residence and consularized by the Indian Embassy in the foreign country.

Other Required details and documents for incorporation-

– Proposed Company Name

– Any other business in which the proposed directors are interested

– Address Proof of Proposed Place of Business such as Sale Deed or Rental Agreement

– Utility Bill (Electricity, Telephone, Gas Bill etc) in the name of the premises (not older than 2 months)

– NOC for use of premises as Registered Office.

There are various other documents prepared for the purpose of Incorporation which have to be signed by the proposed directors and subscribers of the Company.

In case such documents are signed outside India by the foreign directors and subscribers, then all such documents shall be required to be notarized by a Public Notary and consularized or apostilled by the competent authority of the foreign country.

Note- Apostillation is acceptable in 105 member-countries of the Hague Convention. In other countries, consularization is to be done by the competent authority.

Nikita Bhatia is the co-founder of VenturEasy, an online platform for Company registration, book-keeping, accounting, tax consultancy and legal compliances in India. A Chartered Accountant and company secretary by profession, she has wide experience in the fields of audit, accountancy, taxation and corporate governance.