Company Registration by NRI in India: A Practical Guide

Overview

Company registration by NRI in India has become increasingly popular due to the country’s growing economy, large consumer market, and business-friendly environment. NRIs and OCIs can establish businesses in India through eligible business structures, subject to the Companies Act, 2013, FEMA, and applicable FDI regulations. With simplified online incorporation procedures and liberalized foreign investment policies, India offers attractive opportunities for non-residents looking to start or expand a business.

In this blog, we will discuss the process of Company registration by NRI in India, eligibility criteria, FEMA regulations, required documents and key compliance requirements.

How can an NRI start a business in India?

Company registration by NRI in India is permitted under the Companies Act, 2013, FEMA regulations, and applicable FDI policies. NRIs and OCIs can establish a business in India through different business structures based on their business objectives and investment plans. The most commonly preferred options for Company registration by NRI are:

Limited Liability Partnership (LLP): An LLP offers limited liability protection and operational flexibility. NRIs can invest in a Limited Liability Partnership subject to FEMA and applicable FDI regulations.

Private Limited Company: A Private Limited Company is one of the most preferred structures for Company registration by NRI due to its separate legal identity, limited liability, credibility, and growth potential. It is often chosen by NRIs looking to establish and expand their business operations in India.

Can an NRI be the Sole Shareholder of a Company in India?

Yes, an NRI or OCI can be the sole shareholder of an Indian company, subject to the provisions of FEMA and applicable FDI regulations. However, a Private Limited Company must have a minimum of two members. Therefore, where an NRI intends to hold the majority ownership, an additional shareholder will be required to satisfy the minimum shareholder requirement under the Companies Act, 2013.

Foreign ownership is permitted in many sectors under the Automatic Route, subject to sector-specific conditions and applicable regulatory requirements.

Many foreign entrepreneurs are unaware that they can set up a company in India without local ownership participation. Explore the process to register a company in India without having an Indian partner without an Indian shareholder and understand the applicable compliance requirements.

Why Choose Company Registration by NRI Through a Private Limited Company?

A Private Limited Company is one of the most preferred business structures for Company registration by NRI in India due to the following reasons:

• A Private Limited Company can be incorporated with a minimum of two shareholders.
• It provides a separate legal identity and limited liability protection to its shareholders.
• Compliance requirements are comparatively simpler than those applicable to a Public Limited Company.
• Foreign investment can be made under the Automatic Route in many sectors, subject to FEMA and applicable FDI regulations.
• It offers greater credibility and better opportunities for business expansion and fundraising.

Once the company is incorporated, its registration details can be verified through the MCA portal. For a step-by-step explanation, read our guide on how to check company registration on MCA portal.

Prerequisites for Company Registration by NRI in India

Before proceeding with Company registration by NRI in India through a Private Limited Company, the following requirements must be fulfilled:

• Minimum 2 directors.
• Minimum 2 shareholders.
• At least one director must be a resident in India.
• A registered office address in India.
• Directors must obtain a Digital Signature Certificate (DSC) for signing incorporation documents electronically. DIN can be allotted during the incorporation process.
• Valid identity and address proof of the proposed directors and shareholders.
• In the case of NRI or OCI applicants, documents issued outside India may need to be notarized, apostilled, or consularized, as applicable.

FEMA Regulations for Company Registration by NRI in India

Company registration by NRI in India is governed by the Foreign Exchange Management Act, 1999 (FEMA), the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the applicable Foreign Direct Investment (FDI) Policy issued by the Government of India.

Under the FEMA framework, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) are permitted to invest in Indian companies, subject to sector-specific conditions and FDI regulations. They may acquire shares in an existing company, subscribe to shares during incorporation, or establish a new business in India.

NRIs and OCIs are generally permitted to make investments on a non-repatriation basis in accordance with FEMA provisions. Such investments are typically treated at par with domestic investments, subject to applicable regulations.

Most sectors permit foreign investment under the Automatic Route, where prior government approval is not required. However, investments in certain sectors may require approval under the Government Route and must comply with applicable regulatory conditions.

Therefore, before proceeding with Company registration, it is important to verify the FDI eligibility and sector-specific requirements applicable to the proposed business activity.

Download: Schedule 4 – Investment on Non-Repatriation Basis by NRI and OCI

This document provides an overview of the provisions relating to non-repatriation investments by NRIs and OCIs in Indian companies and LLPs.

Process of Company Registration by NRI in India

The process of Company registration by NRI in India is largely online through the MCA V3 portal. A Private Limited Company is incorporated using the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) web form, which provides an integrated system for company registration and statutory registrations.

The process generally involves the following steps:

1. Obtain Digital Signature Certificates (DSC) for the proposed directors and shareholders.
2. Apply for company name reservation through SPICe+ Part A.
3. File SPICe+ Part B along with the required incorporation documents.
4. Obtain Director Identification Number (DIN) for eligible directors, if not already allotted.
5. Submit e-MOA, e-AOA, AGILE-PRO-S and other linked forms.
6. Receive the Certificate of Incorporation (COI), along with PAN and TAN issued by the authorities.

Through the integrated SPICe+ framework, Company registration by NRI can also facilitate registrations such as EPFO, ESIC, Professional Tax (where applicable), and company bank account opening. GST registration may be obtained through the linked form if required by the business.

After company incorporation, businesses should regularly maintain their MCA records, including contact details. Here’s the process to update email ID on the MCA V3 Portal for a company or LLP.

SPICe+ Form for Company Registration by NRI

The SPICe+ form is divided into two parts:

Part A: Used for reserving the proposed company name.

Part B: Used for company incorporation and related registrations, including:

• Company incorporation
• DIN allotment
• PAN and TAN allotment
• EPFO registration
• ESIC registration
• Professional Tax registration (Maharashtra, where applicable)
• Bank account application
• GST registration (if applied for)

Applicants may either reserve the company name through Part A and file Part B later, or submit both Part A and Part B together through the integrated SPICe+ process.

Documents Required for Company Registration by NRI in India

Note: Documents issued outside India must comply with MCA documentation requirements and applicable notarization or apostille procedures based on the country of residence.

Tax on Dividends Received by NRIs from an Indian Company

When an Indian company pays dividends to a Non-Resident Indian (NRI), tax is generally required to be deducted at source under Section 195 of the Income Tax Act, 1961. The old Section 195 of the 1961 Act is now referred to as Section 393(2) [Table: Sl. No. 17] of the Income Tax Act, 2025.

As per the prevailing provisions, dividends paid to NRIs are generally subject to TDS at 20% plus applicable surcharge and cess. However, if the NRI is eligible to claim benefits under a Double Taxation Avoidance Agreement (DTAA) and furnishes the prescribed documents, the lower DTAA rate, if applicable, may be used.

Compliance Requirements After Company Registration by NRI

After incorporation, the company must comply with the provisions of the Companies Act, 2013, Income Tax laws, and other applicable regulations. Key compliance requirements include:

• Filing annual financial statements and annual returns with the Registrar of Companies (ROC).
• Filing income tax returns within the prescribed due dates.
• Maintaining statutory registers and company records.
• Conducting board meetings and complying with corporate governance requirements.
• Complying with FEMA and FDI reporting requirements, wherever applicable.

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Conclusion

Company registration by NRI in India offers overseas Indians an opportunity to participate in one of the world’s fastest-growing economies. With a streamlined online incorporation process, liberalized FDI policies, and a supportive regulatory framework, NRIs and OCIs can establish and operate businesses in India with relative ease.

However, it is important to evaluate the applicable FEMA provisions, sector-specific FDI conditions, documentation requirements, and post-incorporation compliance obligations before proceeding. Proper planning and regulatory compliance can help ensure a smooth and successful business setup in India.

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