HOW A FOREIGN NATIONAL, A NRI , OR A FOREIGN COMPANY CAN START A BUSINESS IN INDIA
Setting up Business in India by foreign companies or by any foreign national is no more an impossible task these days.
There has been many opportunities in India has attracted a large amount of Foreign Direct Investment into the country and each year the amount of FDI inflow keeps increasing due to several foreign businesses starting their operations in India. In this post, the way to set up a business in India is discussed in detail for foreign companies and foreign nationals.
How the Foreign Companies Can Enter India for Business?
There are mainly two types of entry strategy for foreign businesses in India, registration of a company or establishing a branch/liaison office.
- By registering an entity like a private limited company, Limited Liability Partnership (LLP), or proprietary/ partnership firms.
Out of all the above forms of entities, the cheapest and the easiest way to set up business in India is by incorporating a private limited company, it will take 10-15 days for getting all the approvals and registration certificate.
The foreign direct investment which ranges up to 100% in a private limited company or a limited company (LLP) happen under the automatic route and in such case, no special permission is required from the Central Government in India.
100% FDI in LLP is also allowed now, but there are no shareholders in LLP but partners hence making it ideal for service or professional firms.
While all other forms of entities require RBI approval, thus making it not much ideal for foreign investors.
- One can opt to register a branch office, project office, or liaison office which necessarily requires RBI and/or Government approval.
Therefore, if we consider the cost and the time which is required for the registration of a branch office, project office, or liaison office is undoubtedly higher than the time and cost attached to the incorporation of a private limited company in India.
What type of company can a foreign national or an NRI can incorporate in India?
A foreign national or a NRI can register a private limited company, public limited company or Limited Liability Partnership (LLP) in India.
According to the FDI and FEMA regulations, in India the ideal type of business entity that the foreign nationals and the NRI can establish would be a private limited or public limited company as 100% FDI is allowed under the automatic route for most of the business sectors.
What are the pre-requisites for incorporating a Private or Public Limited Company?
To establish a company in India, there is a requirement of a minimum of two directors (persons) for a private limited company and a public limited company must have a minimum of three directors. Also, there should be at least one director who is both an Indian citizen and an Indian Resident (any person who has lived in India for over 186 days is considered an Indian Resident).
Registered Office Address:
Before starting the process of incorporation, the proposed company must have an office address in India. The registered office address proof, such as the sale deed or a rental agreement, must be submitted while filing the incorporation application. In case of a leased or rented property, the NOC (No Objection Certificate) from the owner of the rented or leased premises must be submitted for the use of the premises as a registered office.
What are the documents required for a Company Incorporation by a Foreign National or a NRI?
The documents which are required by foreign nationals residing in any foreign country for incorporating a company in India are:
- Address proof such as driving license, bank statement or any utility bill (not older than two months)
All the above said documents must be notarised by a Public Notary and be apostilled by the competent authority in their country of residence.
The documents which are required by foreign residents residing in India for incorporating a company are:
- Resident permit
- Business visa
- Bank statement or any utility bill (not older than two months)
All the above said documents must be attested by the Consulate of the Foreign Embassy in India.
The documents which are required by NRIs for incorporating a company in India are:
- Proof of identity
- PAN card
- Aadhaar card, driving license, voter ID, if any
- Current address proof such as a copy of the driving license, bank statement or any utility bill in the country of residence (not older than two months)
The current address proof must be notarised by a Public Notary in the country of residence and apostilled by the Indian Embassy in the foreign country.
What is the process of a Company Registration in India?
The process of a company registration in India by foreign and NRI directors are similar to incorporating a company in India by the Indian directors.
- All the directors need to obtain a DSC
- All the directors need to obtain a DIN
- Registration on the MCA (Ministry of Corporate Affairs) portal and filing of Form
- Uploading the required documents along with the MoA, AoA.
And thereafter soon the Registrar will issue the Incorporation Certificate after verification of the application and all the submitted documents.
How can we help you with your business set up in India?
We can assist you in registering your company in India by obtaining important documents and approval from the government. We will provide you comprehensive advice and consultation on the best business to setup in India.
We will be assisting you in Registering your Company.
Manage your Company such as filing of GST, TDS, and all other taxes and documents for the company from time to time. We will even provide you with our assistance on Secretarial and legal audits: Compliance with regulations such as annual secretary, board meetings, and the keeping of official registers.
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Author: Madhurima Dutta, Founding Partner & CEO, Vidma Consulting Group LLP