Indian Company Registration for NRIs and Foreign Nationals

Among NRIs and foreign nationals for investment, India is a preferred destination because of its wealth of resources and booming economy. Considering this, to attract Foreign Direct Investment (FDI), the Indian government allows NRIs and foreign nationals to invest in India. Additionally, under the Foreign Exchange Management Act, 1999 (FEMA) Regulations, the Indian government allowed NRIs as accepted entities for investment.

Apart from this, through FEMA, RBI, and FDI policies, the government also simplified the business setup for NRIs and foreign nationals in India. Confused? Read the blog and know everything about Indian company registration for NRIs and foreign nationals, and clear all your doubts. 

Types of Companies NRIs and Foreign Nationals Can Register in India

When it comes to starting a business in India, it is vital for NRIs and foreign nationals to choose the right business structure. It depends on several factors such as the nature of the business, compliance ease, investment model, and long-term financial goals. Further, let's know the most popular company types that NRIs and foreign nationals can select in India:

Private Limited Company

For NRIs and foreign nationals, a private limited company is one of the most popular business structures. Through the automatic route in most sectors, it allow 100% foreign direct investment (FDI), provides limited liability protections, and is ideal for SMEs and startups. A private limited company can have a maximum of 200 shareholders. 

It is the best company structure for foreign nationals and NRIs because it has a separate legal entity, is FDI-friendly, scalable, and offers complete control with limited liability. Due to its adaptability and simplicity, this business structure is highly favored by NRIs and foreign company setup. 

Public Limited Company

A Public Limited Company under the provisions of the Companies Act 2013 is a business entity formed for any lawful purpose, and it is not a private company. A public company should have at least 7 members. However, there is no limit on the maximum number of members in it. Additionally, at the end of the name of the company, there should be 'Limited' stated. 

Further, a company working outside India as a start-up structure wants to start its operations in India, can incorporate a public limited company. Apart from this, they can also raise capital for the public. 

Limited Liability Partnership

A limited liability partnership is a hybrid business model. It consist the flexibility of partnership with the benefit of limited liability. It is suitable for small businesses or professional services that, compared to a private limited company, offers lighten compliance burden. 

Under the automatic route in sectors, 100% FDI is allowed in some sectors. Additionally, there should be one resident designated partner in India. Apart from this, it is ideal for NRIs and foreign nationals who want joint ventures with Indian professionals. 

From the above information, as per the FDI and FEMA regulations, the ideal business structure for NRIs and foreign nationals to establish a business in India is a private or public limited company. It is because the automatic route allows FDI for most sectors.

Moreover, as per FEMA guidelines, FDI is not permitted for any other types of business. It includes a one-person company, proprietorship firm, or partnership firm. Therefore, NRIs and foreign nationals cannot start these types of businesses in India. 

Now moving ahead, let's know the prerequisites for registration of a private or public limited company. 

Pre-requisites for Registration of Private or Public Limited Company

Before setting up a public or private limited company in India, NRIs and foreign nationals should consider the following things:

Directors

According to the Companies Act, 2013, NRIs, foreign nationals, and residents can be directors in an Indian company. To be a director in an Indian company, they need to obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC).

Additionally, there should be a minimum of two directors in a private limited company, and in a public company, there should be at least three directors. Apart from this, the company set up by NRIs or foreign nationals should have at least one Indian citizen director living in India. 

Shareholders

In a private limited company, there should be a minimum of two members, and in a public limited company, there should be at least seven members. Additionally, the private limited company can have a maximum of 200 members, whereas in the public limited company, there is no such maximum limit.

Further, subject to FDI guidelines, NRIs and foreign nationals can be shareholders in an Indian company. Since in several sectors under the automatic route in India, 100% FDI is allowed to RBI, it is simple for an NRI and foreign national to obtain ownership of shares in an Indian company. 

Office Address

Before incorporation, the proposed company needs to have an office address. Considering this, NRIs and foreign nationals should ensure that their company has an office in India. When filing the incorporation application, it is vital to submit a rental agreement or a sale deed to prove the office address. 

Additionally, when the office company is situated in a rented or leased property, the owner of the leased or rented property should provide the NOC (No Objection Certificate). Further, it should be submitted for the use of the premises as a registered office. 

These are some of the prerequisites for registration of a private or public limited company that NRIs and foreign nationals should consider in India. Moving ahead, let's know the documents required for company registration in India. 

Documents Required for Company Registration

The documents required by NRIs and foreign nationals for company registration in India are as follows:

• Passport
• Address proof such as a bank statement, a driving license, or any utility bill (not older than two months)

The above-mentioned documents should be notarized by a Public Notary. Additionally, they should be apostilled by the competent authority in their resident country.

Apart from this, the documents required by foreign residents living in India for registering a company in India are as follows:

• Passport
• Business visa
• Resident permit
• Bank statement or any utility bill (not older than two months)

The above-stated documents should be attested by the consulate of the Foreign Embassy in India. Moreover, the documents required by NRIs for setting up a business in India are as follows:

• Identity proof
• PAN card
• Driving license, Aadhaar card, voter ID, if any
• Current address proof, such as a photocopy of the bank statement, driving license, or any utility bill in the resident country (should not be older than two months)

Additionally, your current address proof should be notarised by the resident country. Apart from this, the documents in the foreign country should be apostilled by the Indian Embassy. 

These are the documents required by NRIs and foreign nationals for company registration in India. Moving further, let's know the process of company registration in India. 

How NRIs and Foreign Nationals Can Register a Company in India?

The process to register a company in India for NRIs and foreign nationals is similar to that of Indian directors and shareholders. Here is how it is done:

• NRIs and foreign national directors need to obtain a DSC
• Additionally, they also need to obtain DIN 
• Filing of Form SPICe+ and registration on the MCA (Ministry of Corporate Affairs) portal
• Upload all the documents includeing e-MOA and e-AOA, related to the company

Once the application and documents are verified by the Registrar, you will get the Incorporation Certificate. 

Final Thoughts

Lastly, the Indian company registration for NRIs and foreign nationals by the online systems and government policies has been made more convenient and simplified. With proper planning, the right business structure, correct documents, and expert guidance, NRIs and foreign nationals can smoothly start their Indian business journey. 

Furthermore, if you are looking for professional support to set up your business in India, connect with Savetaxs. We are a reliable ally for foreign nationals and NRIs who want to start and expand their business in India without any hassle.