India is one of the fastest growing economies in the world today. Many foreign companies are starting their operations in India to take advantage of this one of the fastest growing economies in the world. In this article we will discuss the procedure to be followed by NRI, Foreign National or Foreign Company to start business in India.
Company Registration in India
For NRI, Foreign Nationals and Foreign Companies, Private Limited Company is considered to be the most ideal type of business that can be registered in India. While Private Limited Company needs minimum two shareholders and it can have maximum 200 shareholders, a Public Limited Company should have minimum seven shareholders and there is no limit on maximum number of shareholders. Compliances of a Public Limited Company are more stringent as compared to Private Limited Company, and therefore a Foreign National, NRI or Foreign Company should go for Private Limited Company to start with. Foreign Direct Investment (FDI) is not allowed in other types of businesses like Proprietorship, Partnership Firm and One Person Company while prior approval of RBI is required for FDI in LLP.
How to Register Company in India
NRI, Person of Indian Origin (PIO) and Foreign Nationals can become directors of an Indian Company.
- To become director of an Indian Company one must obtain Directors Identification Number (DIN) and Digital Signature Certificate (DSC). Most of the forms filed with the Registrar of Companies (ROC) are to be signed with the DSC.
- A DSC can be obtained by NRI or Foreign National by providing self attested copy of notarized passport and filling a specified form. All the documents along with the form must be attested by native country embassy. If NRI or Foreign National is having PAN Card, it is mandatory to mention PAN on the DSC application form and an attested copy of PAN Card is also required. On receipt of all the documents, DSC can be issued within 24 hours.
- Once DSC is received, DIN of Foreign National or NRI can be obtained and the person becomes eligible to become Director or a Private Limited or Limited Company.
- For registration of Private Limited Company or Public Limited Company with NRI, Foreign National or Foreign Company the identity proof, address proof and documents regarding foreign origin are necessary. All these documents should be attested by the Indian embassy or notary public.
New Company Registration Mandates
- A Private Limited should have minimum two directors and a Public Limited Company should have minimum three directors. One of the directors in both the cases must be Indian Citizen and Resident of India, while other Directors can be of any nationality.
- The Registered Office of the Company must be situated in India.
Subject to FDI norms, the shares of Company can be held by NRI, Foreign National or Foreign Company. FDI in Private Limited and Limited Companies in India is allowed through automatic route.
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