The Indian economy is booming and increasing significantly in value. As a result, more entrepreneurs are looking to start a business in India to capitalise on the immense demand and growth. However, before starting a business, choosing an effective business structure is important to ensure it can complement the business activities. Among numerous business structures you can choose from, a private limited company is one of the most common and provides the utmost operational flexibility.
Can a foreign national register a private limited company in India? This question can be confusing for individuals, as some companies may have foreign nationals as directors or owners. This article will help you determine whether a foreign national can register a private limited company in India and explain the registration process.
Can a foreign national register a private limited company in India
Yes, Indian laws under the Ministry of Corporate Affairs’s structure allow Non-resident Indians and foreign nationals to register a private limited company in India. Foreign investment is allowed in two ways in India: automatic and approval. Foreign Direct Investment (FDI) is only allowed under the automatic route for a private limited company, making it possible for foreign nationals to register a private limited company in India.
The procedure of private limited company registration by a foreign national
The process of private limited company registration by a foreign national is similar to the process set for an Indian national. Here are the steps involved:
- DSC: The foreign national must obtain a Digital Signature Certificate from recognised authorities to digitally sign the registration form.
- DIN: Obtain a Director Identification Number (DIN) by filling out DIR-3 or filling out the SPICe+ form.
- Name approval: Fill out SPICe+ PART A and enter two names for registration. The Registrar of Companies (RoC) will analyse the application and will reserve the company name.
- SPICe+ form: Visit the MCA portal and fill out the SPICe+ form to register the company, issue DIN, TAN, and PAN applications, and register ESIC and EPFO.
- Certificate of Incorporation: After successful verification of the SPICe+ form, the foreign national will receive the certificate of incorporation along with PAN and TAN.
Documents required for company registration by a foreign national
Here are the documents required:
From Directors
- Copy of PAN declaration (in case of foreign national)
- Copy of passport
- Proof of identity, such as a Driving Licence, Voter ID, Passport
- Residential proof such as utility bills and bank statements not older than 2 months.
- Director’s consent
- Disclosure of interest in other entities
- Declaration in Form INC-9
From Subscribers
- Copy of PAN declaration (in case of foreign national)
- Copy of passport
- Proof of identity, such as a Driving Licence, Voter ID, Passport
- Residential proof such as utility bills and bank statements not older than 2 months.
- Director’s consent
- Declaration in Form INC-9
From Company
- Copy of Property Deed (in case of owned property)
- Copy of Sale Deed
- Copy of Lease Deed (in case of rented premises)
- Copy of gas, mobile, or electricity bill of the registered office, not older than 2 months
- No objection certificate from the premises’s owner for using it as the registered office.
- Memorandum of Association and Articles of Association of the company.
If the directors or subscribers are foreign nationals, all the above mentioned documents must be notarised, consularised, or apostilled. Furthermore, if the documents are in any language other than English, the copies must be translated into English and then notarised, consularised, or apostilled.
Conclusion
Registering a private limited company is beneficial as it creates a separate legal identity for the company. Once registered, the company can apply for loans from banks and NBFCs using their online marketplace or platform. Furthermore, it has limited liability, protecting the owners and shareholders in case of bankruptcy and insolvency. Indian laws also allow foreign nationals to register a private limited company in India. However, the documents required are slightly different, making it important to know which documents must be submitted. Now that you know how a foreign national can register a private limited company, you can ensure a seamless registration process.
