Incorporation of a Company in India by NRIs and Foreign Nationals

India is a preferred destination for investment from NRIs, Foreign Nationals and Foreign Companies due to its booming economy and wealth of resources. India is among the fastest growing economics in the World, slated for tremendous growth over the coming decades with plenty of business opportunities. Foreign investment into India is at an all time high and is pegged to grow even higher with regulatory reforms and an investor friendly climate. In this context, we look at the process and procedure for NRI or Foreign National or Foreign Company to invest or start, manager and grow a business in India.

Company Registration in India

NRIs and Foreign Nationals must always choose to invest or start a Private Limited Company or Limited Company in India. Business entities like Private Limited Company and Limited Company ionly allow for Foreign Direct Investment (FDI) into India under the automatic route. NRIs and Foreign Nationals are not allowed to invest or start a Proprietorship or Partnership or One Person Company in India, while FDI in LLP requires prior approval from the Reserve Bank of India. Therefore, the most ideal entity for NRIs and Foreign Nationals to invest or start a business in India would be a Private Limited Company.

Limited Company can incorporated by the Foreign promoter if the number of investors in the venture would be more than 7 and the company would have to raise equity funds from a number of shareholders. Private Limited Companies can have upto 200 shareholders, while a Limited Company is allowed to have unlimited shareholders. Limited Company must also comply with more stringent filing requirements when compared to a Private Limited Company.

Board of Directors in a Company

Companies Act, 2013 permits NRIs, PIOs, Foreign Nationals and Foreign Residents to act as a Director of an Indian Company. To become Director of an Indian Company, the person must first obtain a Director Identification Number which is called DIN after obtaining Digital Signature Certificate. To obtain a Digital Certificate, the Foreign National or NRI must submit self attested and Notarized copy of his/her Passport along with Address proof (which can be Driving License, Electricity Bill, Municipal Utility Bill, Ration Card etc.)

Once the Digital Signature Certificate is obtained, DIN can be obtained for the foreign national or NRI and he/she may be added to the Board of Directors during Incorporation of a Company in India.

A Private Limited Company must have a minimum of two Directors and can have a maximum of Seven Directors in the Company. It is recommended that atleast one Director be an Indian Citizen and Indian Resident, while the other Board of Members can be of any Nationality or Residency.

Shareholders

The shareholding of the Indian Company can be held by a Foreign National or Foreign Entity, subject to the FDI norms in India. Companies Act, 2013 requires that a Private Limited Company have a minimum of two shareholders and a maximum of two hundred shareholders. Since Reserve Bank of India allows 100% FDI in many of the sectors in India under the automatic route, the process for ownership of shares of an Indian Company by a Foreign National of Foreign Entity is simple.

Process of Incorporation of a Company

The procedure for incorporation of a Company by Foreign National with Foreign entity or NRIs are similar as of incorporation by Indian Citizen with Indian Directors and shareholders. Some of the additional steps to be complied with while incorporating the Company by Foreign Nationals or NRIs.

We have team of professional including qualified Chartered Accountant, Solicitors, Attorney & Other type of legal professional who can assist you in a friendly way in incorporation of Company by NRIs or Foreign Nationals. You are advised to contact us in-person for complete information and documentation required for Company incorporation in India

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