Incredible NRIs and OCIs alike are flocking to India to build businesses. India is the world’s fastest expanding economy and has been booming for decades. India is a potential place to establish a new company. The manufacturing industry is currently booming, bolstered by a large pool of trained and inexpensive labor, and consumer demand remains robust, attracting investors to set up businesses and invest in India.

Not only have that, but in order to make India a place where “doing business is easy,” the government has always strived to made it simple for both Indian residents and NRIs or OCIs. The Foreign Investment Promotion Board (FIPB) was established by the Ministry of Commerce and Industry to help potential foreign investors avoid the pitfalls of doing business in India.

Challenges that NRI’s face when setting up business in India

  • The legal stalemate that begins with the initiation process. NRIs frequently have little choice but to choose Private Limited company registration for a variety of reasons and other accessible conditions, as all other solutions are less practical. Even if NRIs register as a Private Limited Company with a minimum of two shareholders, one of the owners must be a resident of India.
  • Another significant issue is the requirement for a corporate office in the country, which will be an important element in the registration of the firm. NRIs typically find it difficult to rent office space with the electricity bill and phone bill addressed to the owner (i.e. NRI) due to geographical constraints.
  • Problems with required documents: To make matters worse, NRIs must get a Director Identification Number (DIN), which is required for a company to operate. NRIs can only get a DIN with the Indian Embassy’s verification and attestation in the nation where they are staying.
  • The company’s next obligation is to obtain a PAN and TAN number. These difficulties make it difficult for NRIs to keep their investments in India under their own corporate entities.

Two ways an NRI can do Business in India

Private limited company and limited liability partnership are the two business structures that are considered ideal for NRI’s in India. However, for ‘Non-resident Indians’ (NRIs) and Overseas Citizens of India (OCIs), a Private Limited Company (PLC) registration in India may be the best option.

Foreign nationals and NRIs must always invest in or establish a Private Limited Company or Limited Company in India. Foreign Direct Investment (FDI) into India is only permitted through the automatic route for business organizations such as a Private Limited Company and a Limited Company. NRIs and foreign nationals are not permitted to invest in or establish a proprietorship, partnership, or one-person company in India, and FDI in LLP is subject to Reserve Bank of India permission.

As a result, a Private Limited Company is the best option for NRIs and foreign nationals looking to invest or create a business in India. If there are more than 7 investors in the business, a limited company can be formed by a foreign promoter, and the company will need to raise equity money from a number of shareholders. A Limited Company can have up to 200 shareholders, however a Private Limited Company can have an infinite number of shareholders. When compared to a Private Limited Company, Limited Companies are subject to more severe statutory filing requirements.

Documents Needed for NRI’s to Register a Business in India

Foreign nationals resident in their home country will need the following documents to form a corporation in India:

Address evidence in the passport, such as a driver’s licence, a bank statement, or a utility bill (not older than two months). All of the above documents must be notarized by a Public Notary and apostil led by their country’s relevant government.

The following documents are required for foreign residents residing in India to form a company:

  • Permit to stay in the United States Passport Business visa
  • Any utility bill or bank statement (not older than two months)
  • The Consulate of the Foreign Embassy in India must certify all of the above documents.

The following are the paperwork that NRIs will need to form a company in India:

  • Identification proof
  • PAN card, Aadhaar card, driver’s license, and, if applicable, voter ID
  • Current address proof in the nation of residency, such as a copy of the driver’s licence, bank statement, or any utility bill (not older than two months)

The current address proof must be notarized and make sure the users by the Indian Embassy in the foreign country by a Public Notary in the country of residency.

Pre-requisites for NRI’s in forming a private limited company in India

  • There are two directors.
  • There are two shareholders.
  • An Indian business address. (At least one of the directors must be a resident of India)
  • A Director Identification Number (DIN) and a Digital Signature Certificate are required to become a director of an Indian company (DSC). The DSC must sign most of the paperwork filed with the Registrar of Companies (ROC).
  • An NRI must provide proof of identification, address, and Indian origin documents in order to register a Private Limited Company or a Public Limited Company. Every single one of these documents must be authenticated by an Indian embassy or a notary public.

Pre-requisites for NRI’s in forming a Limited liability company in India

  • Every LLP must have at least two partners, with at least two people identified as designated partners. One of them should be an Indian who lives in the area.
  • The FiLLiP LLP incorporation form, along with all required paperwork, must be submitted.
  • FDI in LLP might take the form of a capital investment or the purchase of shares. In some instances, government approval may be required.
  • LLP partnership agreements, ID proof, notarized NRI paperwork by the Indian Embassy, DSC, and other documents as stipulated by the Registrar of Companies are examples of documentation (ROC).

Company registration process for An NRI or an OCI in India.

The process of forming a Private Limited Company in India is entirely online. The MCA has updated the older SPICe form with a new web form known as SPICe+ (SPICe Plus). As a result, forming a Private Limited Company has never been easier. You can now incorporate a private limited company with a single application that includes name reservation, incorporation, DIN allocation, mandatory PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra), and bank account opening.

Company Registration Procedures for BRI’s in India

The procedure for NRIs and foreign nationals to register a company in India is similar to the procedure for Indian directors and shareholders to incorporate a company. The steps are as follows:

  • DSC is required for proposed NRI and foreign national directors.
  • Proposed NRI and foreign national directors must register for a DIN number on the Ministry of Corporate Affairs’ website and file Form SPICe+.
  • All company-related papers, including e-MoA and e-AoA, should be uploaded.
  • After the application and paperwork have been verified, the Registrar will issue the Incorporation Certificate.

We provide well-equipped business experts and advice on all business compliance concerns at PhoenixTax- Tax consultant in Tambaram, Chennai.

If you are an NRI looking for Company registration in Tambaram, Chennai then get in touch with the registration experts at Phoenix Tax.