Can An NRI Register A Company in India?

As a rapidly developing economy and commercial domain, India is attracting numerous foreign entities and multinational companies. More so, it has an ever-expanding service sector and manufacturing hub in the country. The economy of any country is dependent on its human resources and goods-producing capacity. Many companies are now shifting their operational base to south- Asian countries. India is one of the principal territories for such multinational ventures. Thus, this pacing economy has attracted investments from investors all around the world. The non-resident Indians or NRIs are also among those folks who are greatly inclined to set up their business in India.

Here are some of the reasons behind India as a lucrative destination for NRI and foreign investment.

• It has a huge market within the country, which attributable to its huge population of 1.2 billion. The market growth rate in the country is enormously high in India.
• India has the availability of educated and skilled labor that is already trained in widely spoken languages such as English at an economical salary.
• Has a developing infrastructure
• Possesses a wealth of resources
• Growth effective climate.
• Facile taxation system
• And the most important, feasible, and company-friendly corporate laws.

Both individuals and institutions can reap huge gains from the Indian market with its rapidly growing economy and consumer spending power.

How to invest and which type of company is favorable?

Now being a foreign investor, you can set up or invest in any of the following two types of companies in India:

• Private limited company
• Public Company

Private limited companies are more feasible and easy to set up than the latter for NRIs. The Indian law does not permit foreign national investment in other types of entities such as a proprietorship or a partnership. Thus, incorporating a company seems to be the most practical option.

Why private limited companies?

Private limited companies can be the most beneficial and prosperous for NRIs since –

• There is a need for a maximum of two shareholders.
• It has more exemptions than public limited companies.
• They are more suitable in the nature of capital investments and legal prospects.
• There is no need for approval from the government or the Reserve Bank of India for private limited companies with foreign investments.

Conditions to set up a private limited company in India by a Non-Resident Indian:

• The private company must have a minimum of 2 directors ( at least one must be an Indian resident).
• It must cater to the requirement of having two shareholders.
• Possess a registered office address in India.
• A digital signature certificate( DSC) and Director Identification Number(DIN). These are essential for leading the director’s post in a private limited company in India. Since most of the forms filed with the registrar of companies (ROC) in India are signed using the digital signature certificate.
• To register any company in India by an NRI, he/ she must possess proof of him originally being an Indian citizen, identity proof, and address proof. All these documents must be previously attested through the Indian embassy or notary public.

Once all these documents are prepared, you can move forward with the successive steps to set up your base in India:

How to set up a private limited company in India for an NRI?

The registration process of companies in India has recently shifted to virtual spaces and eased the task a little. The recent registrations are completed using the SPICe plus web portal.

The procedure to register a company on SPICe plus is divided into two parts:

Part A: In this section, you can apply for registering the name of the company with the ROC using SPICe plus. You can also seek name approval and register your proposed company in one go with the Part A form.

Part B: This part of the form includes the registration for the following services:-

• Incorporation
• Allotment of DIN
• Mandatory PAN issue
• Mandatory TAN issue
• Issue of EPFO registration
• Issue of profession tax registration. This is only applicable if the company address is in the state of Maharashtra.
• Allotment of GST identification number.
• Issue of ESIC registration.
• Mandatory opening of the bank accounts for the company.

You have an option of first filling Part A and seeking approval for the name of the company and further filing Part B for the incorporation of the company, or you can simply file both of them together and completing the process in one go.

Documents to keep handy during the procedure for NRIs:

A person needs a series of documents to complete the process. The documents list starts with proof of nationality and also mandatorily needs a PAN card. This is followed by identity proof such as a passport. As mentioned earlier, one of the directors must be a resident of India, and he/ she must have residence proof that must include an electricity bill, a bank statement, and a driver’s license. Further, the office address needs to be verified with an electricity bill on that address, a gas bill, a water bill, NOC from the premises owner, and a postpaid telephone bill or mobile bill. If the registration is done from India, then the list ends here. If not done from India, all the documents must be attested or apostilled and notarized. This also includes MOA, AOA, address proof, etc.

Once both the forms are filled and submitted online on SPICe plus and all the documents are cross verified by the officials, the procedure is complete. This takes nearly a month or so. Furthermore, your company will get registered, and you can begin your commerce journey in India.

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