Can an NRI or Foreigner Become a Director in an Indian Private Limited Company? (2025 Guide)  

Introduction

Indian businesses are increasingly engaging with global talent and investment. Naturally, NRIs and foreign nationals often take up roles as directors, shareholders, or even Managing Directors (MDs) in Indian private limited companies.

This raises some important questions:

1. Can an NRI or foreigner be appointed as a director or MD?
2. Can they invest in Indian companies?
3. Are they eligible to receive a salary?
4. What compliance steps are needed under MCA, FEMA, and RBI?

Let’s break it down clearly for business owners and legal teams.

Can an NRI or Foreigner Be Appointed as a Director?

Yes. The Companies Act, 2013, allows NRIs and foreign nationals to be appointed as directors in Indian companies.

Types of Director Roles:

At least one director must be a resident Indian (stayed in India for 182+ days in the previous calendar year).

Can an NRI or Foreigner Invest in an Indian Company?  

Yes. They can own shares and even 100% equity in an Indian private limited company, subject to sectoral FDI limits.

FDI through the automatic route does not require prior RBI approval but must be reported via Form FC-GPR on the FIRMS portal.

Step-by-Step Guide to Appoint a Foreign or NRI Director

Step 1: Apply for DSC (Digital Signature Certificate)

Issued by Indian certifying authorities. Foreign documents must be notarized and apostilled or consularized.

Step 2: Apply for DIN (Director Identification Number)

DIN can be applied through SPICe+ form during company incorporation or DIR-3 form for post-incorporation appointments.

Step 3: Board Resolution

Pass a board resolution for appointment if post-incorporation.

Step 4: File DIR-12

Mandatory MCA form to be filed within 30 days of appointment.

Document Checklist

Can an NRI or Foreign Director Be Paid a Salary in India?

Yes. An Indian company can pay salary, sitting fees, commission, or other remuneration to an NRI or foreign director. Tax compliance must be followed.

Key Points:

• PAN is required for TDS purposes.
• Remuneration is taxable in India if services are rendered in India.
• FEMA compliance is essential if salary is remitted abroad.

TDS Chart:

Common Scenarios and Clarifications  

Can a Foreigner Be an Independent Director?  

Yes. For companies required to have independent directors, foreign nationals can qualify if:

• They meet Companies Act criteria.

• They are registered on the Independent Director databank.

• They have valid DIN and DSC.

Summary Table

Frequently Asked Questions (FAQs)