Unlocking Investment Opportunities: A Comprehensive Guide for NRIs Establishing Business in India

Introduction:

India’s robust economic growth and stability have positioned it as a prime investment destination for Non-Resident Indians (NRIs). This trend is further underscored by a recent survey, revealing that over 50 percent of NRIs perceive domestic investments in India as offering superior returns compared to other countries. The steady economic growth across various sectors has mitigated market volatility, making India an attractive choice for NRIs seeking financial stability for themselves and their families.

Navigating the Regulatory Landscape:

Setting up a business in India as an NRI involves compliance with various laws, including Income Tax, Companies Act, GST, FEMA, and RBI regulations. NRIs and foreign citizens can leverage our expert services at NRIeCA to ensure seamless business setup and subsequent compliance.

Business Constitution Options: While NRIs and foreign citizens cannot establish sole proprietorships, partnerships, or one-person companies in India, they have the option to register private limited companies, public limited companies, or Limited Liability Partnerships (LLPs). Private and public limited companies facilitate Foreign Direct Investment (FDI) under the automatic route in most sectors, while LLPs allow FDI in specific sectors or activities permitting 100% FDI through the automatic route.

Preparation for Company or LLP Incorporation:

Before initiating the incorporation process, careful consideration of ownership structure, management, and business location is crucial:

1. Ownership Structure:
2. • Private Limited Company: Requires a minimum of two shareholders (maximum 200).
   • Limited Company: Requires a minimum of seven shareholders, with no maximum limit.
   • LLP: Requires a minimum of two partners, with at least one being an Indian resident.

1. Management of Business:
2. • Directors, who may or may not be shareholders, have administrative powers.
   • NRI and foreign nationals can act as directors, complying with Companies Act 2013 and obtaining a Directors Identification Number.

1. Business Place:
2. • A physical address and presence in India are mandatory for incorporation.
   • Proof of registered office address, including a No Objection Certificate for leased office space, is required.

1. Approval for Investment:
2. • LLPs require prior approval from the Reserve Bank of India for FDI.
   • Private Limited or Limited Companies need approval for specified investments, with an automatic route available for most sectors within monetary caps.

1. Document Compilation:
2. • Essential documents include TIN, PAN card, passport, valid visa, NRI status certificate, and address proofs for both India and the foreign country.
   • Documents submitted by foreign nationals must be attested by the Consulate of the Foreign Embassy in India.

Incorporation Process:

The process for NRIs and foreign nationals to incorporate an Indian company is as under :

• Obtain Digital Signature Certificate for all the directors and shareholders of the proposed company.
• Apply for Director Identification Number (DIN) for all the proposed directors of the company at MCA portal.
• Apply for name approval of the proposed company.
• File incorporation documents with e MOA and e AOA of the company with Form SPICe + and pay requisite fees for registration and stamps.

Conclusion: India’s appeal as an investment destination for NRIs is on the rise, driven by stable economic growth and regulatory facilitation. With expert guidance, NRIs can navigate the legal landscape, establish businesses, and contribute to India’s flourishing economic landscape.