Private Limited Company registration is the most preferred option for Non-Resident Indians (NRIs), foreign nationals, and overseas entities looking to establish a business in India.
When exploring how can we register a company in India, it is important to note that, under FEMA guidelines, Foreign Direct Investment (FDI) is restricted in business structures such as Proprietorships, Partnership Firms, and One Person Companies.
However, LLPs are permitted to receive 100% FDI through the automatic route, provided they operate in sectors where such investment is allowed and no FDI-linked performance conditions apply. 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.
Let us now understand the requirements, conditions and procedure for setting up a Private Limited Company in India with NRI’s and Foreign Nationals:
How Can We Register a Company in India with NRI’s and Foreign Nationals
Minimum Directors:
To register a company in India, at least two directors are required. One of them must be a Resident of India, meaning an individual who has stayed in India for more than 182 days during the previous year.
This requirement of having at least one Resident Indian Director must be maintained throughout the company’s existence. The remaining director(s) can be either resident or non-resident individuals, allowing flexibility while complying with Indian regulations.
Minimum Shareholders:
You can register a company in india with a minimum of two shareholders. There is no restriction on the residential status of shareholders – foreign nationals, non-resident individuals or corporate entities – all or any of them can be the shareholders in a company.
Local Indian address for registered office purposes:
It can be a rented commercial office space or any premises owned by the director, used on consent basis.
Minimum Share Capital:
There is no minimum capital required to register a company in India. However, the general practice is to incorporate the Company with a minimum of INR 1 Lakh. The amount of initial capital infusion can be decided based on the monetary requirements to set up the business.
Documents required to register a company in India
For Indian Resident Director
- Passport Size Photograph
- Copy of PAN Card
- Copy of either Passport, Voter ID or Driving License
- Bank Statement or any Utility Bill in their address – not older than 2 months
For NRI’s/Foreign Directors/Shareholders
- Passport size Photograph
- Copy of Passport
- Copy of Driving License
- Bank Statement or any utility bill in the country of residence – not older than two months
For Foreign or Parent Company
- Certificate of Incorporation
- Bank Statement or any utility bill as proof of address – not older than two months
For Indian Company:
- Address proof of registered office such as Sale Deed or Rental Agreement
- Utility Bill (Electricity, Telephone, Gas Bill etc.) for the premises – not older than 2 months
- NOC for use of premises as Registered Office
All the documents of the NRI or foreign national/entity should be notarized by a Public Notary in the country of residence and consuralized/apostilled by the concerned authorities in their country of residence.
Company Registration Procedure in India:
Step 1. Name Approval: The first step towards Company Registration is reserving the Company name. In case of a foreign subsidiary, it is permissible to use the same name as that of the parent company with the addition of the word “India” to it. The name is approved, provided the same is not identical to existing entities or considered undesirable by law.
Step 2. Procurement of DSC: Parallelly, along with the name approval, the Digital Signature Certificate (DSC) will be procured for the proposed directors of the Company. This DSC is required to file the Incorporation application digitally and will also be used for future compliance reporting.
Step 3. Incorporation Application: This is the final step in the Company Registration process. The approved name is reserved for a period of 20 days and the Incorporation application has to be filed within this period. It requires filing of the Memorandum and Articles of Association of the Company along with various other documents duly executed by the proposed directors and shareholders.
List of Incorporation documents to be executed:
- Articles of Association
- Memorandum of Association
- Declaration by Directors in form DIR 2
- Declaration of Directors/Shareholders in Form INC 9
- PAN Undertaking of foreign company and directors
It is important to note that if the documents are signed outside India by foreign directors or subscribers, they must be notarized by a Public Notary and either consularized or apostilled by the competent authority in the respective foreign country.
Step 4. Bank Account Opening: Once the Company is incorporated, you will receive the Certificate of Incorporation, PAN and TAN for the Company. All the documents will be issued digitally by the Ministry of Corporate Affairs, based on which you can proceed to open a Bank account in India.
VenturEasy specializes in Subsidiary Incorporation in India and how can we register a company in India.
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