A Private Limited company is the most sort after business from among various foreign nationals and NRI entrepreneurs. It is an obvious choice for a business entity as it hails plenty of benefits which we will cover below.
With the Modi wave driving the Indian economy, India has witnessed a copious amount of FDIs in the recent past. A recent economic survey confirmed that; there has been a 40% increase in FDI inflows since October 2014 to June 2015.
The Make in India initiative has been adding to the success of the FDI drive. All this and more goes to establish the fact that NRIs and Foreign Nationals see a huge opportunity in the Indian market.
For an NRI or foreign national looking to invest in India, there are two entry options:
Automatic Route: It means that a person can invest in India without taking any approval subject to the limit specified and go on to form a company. In this case, it is usually the Private Limited Company that opts.
Approval Route: It means investment can be made only with the prior approval from the RBI.
India provides foreign investors a well-proportioned set of fiscal incentive for exports and industrials investments that comprise of:
Investment incentives provided by both Central and state government in which the unit is located.
Foreign exchange controls have been reduced on the account of trade.
Comprehensive tax exemption
Foreign investors can remit earnings from Indian operations.
Foreign trade is mostly free from regulations, and other tariffs have reduced drastically in the past few years.
While the trend is on, we are here to discuss an ideal form of business for an NRI or foreign national and its registration process.
A Private Limited Company is ideal for FDI in India for many reasons, although a few compliance must be met:
A minimum of two shareholders and two directors are compulsory in a Private Limited Company, in which foreign nationals or NRIs are allowed to be the Director of the firm for Private Limited Company Registration. Although to become a director, the person must have Director Identification Number (DIN) followed by acquiring a Digital Signature Certificate.
Private Limited Companies can have up to 200 shareholders. RBI allows 100% FDI in many sectors in India under the automatic route. The process of ownership of shares for a foreign investor is also simple.
NRIs and Indians do share many common company registration procedures. The only difference for a foreign national is that if the present address of the NRI is outside India then each document of theirs must be notarized by the Indian embassy of the country where the person currently resides. He/she must submit an identity proof, address proof, and other documents all attested and notarized.
Having mentioned the above compliances, there are a few recent solutions brought about to ease the company registration process for foreign national/NRIs:
Although the virtual office concept is new in India, many company incorporation firms themselves provide this service. A foreign national/NRI can solve the issue of a registered office by opting for a virtual office space for a nominal fee.
There are plenty of companies in India who are willingly ready to introduce an NRI as a director to their company which can resolve the issue of, one resident Indian in the company.
Therefore, as the foreign nationals or NRIs are showing interest in the Indian markets, the Indian Government to is broadening options and ways for them to do business in India.