Company Registration Process For NRIs In India - A Complete Guide

The Indian economy is soaring, making the country a prime destination for NRIs to start businesses. But what's the cherry on the cake is that the Indian government has made the NRI company registration process more streamlined than ever. The introduction of favourable policies and digital governance has made processes easier and quicker.

In this blog, we will discuss the entire company registration process for NRIs, including eligibility, company types, required documents, the step-by-step process, RBI & FEMA compliance, and more.

Eligibility Criteria for NRIs to Register a Company In India.

Under the Companies Act 2013, NRIs are legally permitted to establish a company in India, provided they comply with the foreign exchange regulations.

The following are the key eligibility conditions.

• Minimum Directors: At least two directors for a Private Limited Company. 
• Resident Director Requirement: Companies incorporated by NRIs must have at least one director who has stayed in India for 182 days or more during the relevant financial year. In simpler terms, one director must be a Resident Indian.
• Valid Identification: NRIs must have their valid passport, overseas address proof, and their PAN card.
• Address: NRIs must have an Indian registered office address for their company.
• DSC & DIN: All the company directors must have a digital signature certificate and Director Identification Number (DIN)

Types Of Companies NRIs Can Register In India

For NRIs, selecting the right business framework is an essential step in incorporating a company in India.

Private Limited Company

This perhaps could be the best choice for NRIs seeking to incorporate a company in India. A private limited company offers the advantages of limited liability, enhanced reputation, and easier financing, and allows 100% foreign direct investment under automaticity in most industries. A private limited company is ideal for SMEs and startups due to its adaptability and simplicity.

Limited Liability Partnership (LLP)

LLP, or the limited liability partnership, is a business model that combines the flexibility of a partnership with the advantages of limited liability. This type of company setup is great for small businesses seeking a light compliance burden and professional services.

In LLP, 100% FDI is allowed under the automatic route in sectors where 100% FDI is permitted.

LLP registration for NRIs is mandatory and requires at least one Indian resident as a partner. NRIs who wish to enter into a joint venture with an Indian professional must form an LLP.

One Person Company

NRIs are permitted to register themselves in an OPC under the Companies Act, 2013. This type of company is suitable for solo entrepreneurs who wish to reap the benefits of limited liability without involving any partners.

Only NRIs, not foreign nationals, are permitted to form OPCs.

This type of company is ideal for freelancers, small traders, and consultants seeking to formalize their business in India.

Documents Required for the Company Registration Process For NRIs

Starting a business in India is not a cakewalk for NRIs. You need to submit a clear set of documentation. These documents help the Ministry of Corporate Affairs (MCA), the RBI, and the Tax Department verify your identity, business structure, address, and the source of investment.

The following documents are required for NRI company registration in India.

Passport and Address Proof

• A valid passport
• Residential address proof, such as a bank statement or utility bill (must not be older than 2 months).

Foreign Business Address Proof

If the company in Indian is being formed either as a branch or subsidiary of a foreign company, here is a set of additional documents that are needed.

• Certificate of incorporation of the parent company.
• Board resolution for setting up an entity in India.
• Business license or the registration certificate.
• Foreign address proof (please ensure that if the foreign address proof is not in English, translate it into English).

Indian Director Documents (If Applicable)

The Indian resident director of the company needs to submit:

• PAN Card
• Aadhaar card or passport.
• Proof of residence (such as a rental agreement or an electricity bill).
• Passport-size photograph.
• Digital Signature Certificate (DSC)
• Director Identification Number (DIN)

Proof Of Registered Office In India

Under the Indian Companies Act, every NRI planning to incorporate a company in India must have a registered office address in India. The set of documents you need is as follows

• Recent utility bill (electricity, water, etc. )
• Rent agreement (if the office is on lease) or the property ownership documents.
• NOC (No Objection Certificate) from the owner of the property stating that he/she permits the business registration at that location.

Pro Tip: NRIs, please ensure that all the foreign documents are notarized or apostilled, depending on their country of origin.

Company Registration Process For NRIs In India

Registering a company in India as an NRI is a streamlined process if understood clearly. The following steps can help you register a company in India as an NRI.

Step 1: Get A DSC & DIN

First and foremost, the directors of the company have to sign a Digital Signature Certificate (DSC) digitally. Once you have successfully obtain the DSC, you must apply for a Director Identification Number (DIN).

The MCA (Ministry of Corporate Affairs) assigns a unique 8-digit Director Identification Number to each company director.

• NRIs can apply for the DSC through a government-approved certifying authority.
• NRIs can apply for the DIN via the SPICe+ form directly during the incorporation.

Step 2: Reserve A Unique Name For The Company

For the next step, choose a unique name for your company that must not be too similar to any other existing company or trademark.

• NRIs can check the availability of the name on the MCA website.
• NRIs can apply for name approval by filing the Reserve Unique Name (RUN) form or through the SPICe+ Form.

Step 3: Draft The MoA and AoA

To define the purpose and internal rules of your company, the Memorandum of Association (MoA) and Articles of Association (AoA) are the key documents.

• The MoA states the capital structure and the company's objectives.
• The AoA highlights the company's internal management, regulations, and rules.

Step 4: File The SPICe+ Form For Incorporation

This initiative allows NRIs to apply for multiple services at once, making the entire process of company registration in India faster.

• The SPICe+ form includes applications for many incorporations, DIN allotment, and even the company's PAN (Permanent Account Number) and TAN (Tax Deduction & Collection Account Number).
• Attach the AoA and MoA, along with all the required documents.

Step 5: Receive The Certificate Of Incorporation

This is the final step where the government officially recognizes you.

• • After the Registrar of Companies (ROC) verifies all submitted documents and forms and confirms that everything is in order, it will issue the Certificate of Incorporation.
• The Certificate of Incorporation is the legitimate proof that your company exists in India. The certificate also includes your Corporate Identification Number (CIN).

RBI & FEMA Compliance for NRI Company Registration

The two primary authorities governing foreign investments in India are the Reserve Bank of India and the Foreign Exchange Management Act (FEMA). Both FEMA and RBI aim to establish a clear and transparent framework.

Automatic Vs The Government Route: Many industries in India under the Automatic Route allow up to 100% of foreign direct investment (FDI). meaning NRIs do ot need any prior RBI or government approval. However, certain sensitive industries, such as media, telecommunications, and defense, require approval from the Government of India. These sensitive industries fall under the "Government Route".

• Profits and capital gains repatriation: NRIs can freely repatriate profits, capital gains, dividends, and interest from their business in India, provided they comply with the FEMA regulatory framework.
• Right Banking Channels: All the foreign funds brought to India for the purpose of company incorporation must be channeled through a legitimate banking institution.
• No Minimum Capital: There is no minimum capital requirement for incorporation.
• FEMA Compliance: All NRI business operations in India involving foreign transactions must comply with the regulatory framework set by FEMA, including maintaining a resident Indian director on the board.

Estimate Cost Of Company Registration For NRIs in India

To determine the registration cost for a company for NRIs in India, certain factors are considered, such as company type, number of directors, and professional services.

Government Fees

• DSC: INR 2000 to INR 3000 each director, approximately.
• DIN: Included in Incorporation
• Name Approval: Minimal cost.
• Stamp Duty: Varies by state.

Professional fees: It varies based on the complexity of the case. However, it can range from Rs 8,000 to Rs 25,000, or even more.

Timeline For NRI Company Registration In India

The company registration process for NRIs is now mostly digital and faster.

• Obtaining DSC and DIN takes around 2-3 working days.
• Name approval takes around 1 to 2 working days
• Incorporation approval takes around 3 to 5 working days.

Provided all submitted documents and forms are accurate, the entire process can take 7 to 10 working days.

Tips For NRIs To Overcome NRI Company Registration Process Challenges

Since incorporating a company in India isn't a cakewalk for NRIs, there's a chance you'll face challenges. But with the right strategy and support, you can easily manage any challenge that comes your way.

The following are some key pointers to consider during the company registration process for NRIs:

• Professional Assistance: It is always advisable to consult a professional service providers who are experts in NRI company registration in India. Such experts can seamlessly guide you through the entire process, handle your documentation, and ensure that all form filings are accurate and on time.
• In-depth Market Research: Before you incorporate, take the time to investigate in detail, conduct comprehensive research, and develop a deep understanding of the Indian market.
• Taxation Guidance: It is better to hire a local tax advisor or a CA who can help you manage cross-border taxation, ensure compliance, and help you reap the benefits of the Double Taxation Avoidance Agreement.

The Bottom Line

Company registration for NRIs, or starting a business in India as an NRI, is now simpler than ever. This is because FDI policies are now liberal, pro-business reforms are in place, and the company registration process has gone digital. However, having an accurate understanding of the key requirements and choosing the right business structure is essential to building a strong foundation for your venture.

For NRIs, the incorporation is just a stepping stone; post-incorporation, you have an ongoing trail of taxation, compliance, and documentation that demands your attention promptly. However, with the right guidance and consultation, the Indian market can be a successful bet for NRIs. And when we talk about NRI business consultation, Savetaxs is the name to trust.

Experts at Savetaxs provide end-to-end consultation on portfolio and relationship management, client acquisition, cross-selling, clarity, financial goals, advisory services, and more. Furthermore, the experts here also consult you on documentation and regulatory compliance. 

Savetaxs aims to bridge the gap between the Indian market and NRI planning to set up a company in India. Connect with us as we serve our clients 24/7 across all the timezones.