Setting Up a Venture in India
In case of the Non-resident Indian (NRI), and Foreign Nationals, the Private Limited Company could be considered as the ideal kind of business that could be registered in India.
In accordance with the guidelines of FEMA, Foreign Direct Investment (FDI) is not permitted in any other classes of businesses like Proprietorship, Partnership Firm and One Person Company. Though investments in the LLP’s are allowed, but it essential to take prior approval from the Reserve Bank of India.
Therefore, the ideal type for NRIs and Foreign Nationals for investing or starting a corporation in India shall be a Private Limited Company. Limited Company shall be incorporated by the foreign promoter if the numeral of investors in the project is required to be above 7 and the business is required to raise equity funds from a number of stakeholders. Private Limited Companies can consist of up to 200 shareholders, while a Limited Company is allowed to have unlimited shareholders. Limited company is required to comply with more severe statutory filing necessities when compared towards a Private Limited Company.
Documents needed by Non-Resident Indian (NRI)
- PAN Card / Passport
- Anyone ID proof which includes Aadhar card, Voter ID card, DL, Passport
- Address proof of the home nation in which the individual is residing, that is driving license, mobile bill, any government address proof of that nation etc.
Documents required for the DIN and DSC
- Passport Copy which is attested by Consulate of Indian Embassy or Foreign Public Notary.
- Driving License Copy or Bank Statement or Electricity Bills or any Property Tax Payment Receipt which is attested through Consulate of Indian Embassy or Foreign Public Notary.
- Latest Photo
- Present Profession, Email and Mobile Number and Education Qualification.
Information required for the Name Approval
- Proposed Company Names
- Share Capital Amount
- Proposed Shareholding Ratio amid the promoters
- A paragraph on the proposed major line of business of the corporation (main objects)
- Full Address of the Registered Office of the Corporation along with the Address of Nearest Police Station
- Copy of the NOC from the proprietor of the Registered Office
- Copy of Latest Electricity Bill or Telephone Bill or Gas Bill of the Registered Office
Frequently Asked Questions
Can an NRI and Foreign Nationals or Foreign Entities register them as a Private Limited Company?
Yes. The NRIs, foreign nationals as well as foreign entities are able to register as a corporation and make investment in India, subject to the Foreign Direct Investment principles set by the RBI. Though, the incorporation rules in India require that one Indian national to be a part of the business on the Board of Directors.
What is a DIN Number?
DIN Number is referred to as a Unique Identification Number which is allocated to the Directors of the Firm by the Government. In order to get a DIN number, an application is required to be made towards the Government in Form DIR- 3 with requisite documents.
What are two ways through which a Foreigner or NRI shall be able to make the investment into the firm in India?
There are two means by means of which a Foreigner or NRI shall be able to make the investment into the firm in India.
- Automatic Route: As per this route, investment made by means of NRI or foreigners shall be completed without any previous approval of the government or the RBI. Just the intimation shall be made to the government that the funding was received from the corporation.
- Approval Route: As per this route, investment shall not be made into the firm until and unless the approval was received from the government.
What is the Process for Incorporation of a Corporation with NRI?
The procedure for incorporation of a business in India by an NRI is similar to that of an incorporation of a private limited business with Indian directors as well as shareholders. The notarization of foreign identity proof, address proof as well as other documents of foreign origin is one additional step that must be fulfilled while incorporating a business by the NRIs or Foreign Entities.