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:
Let’s break it down clearly for business owners and legal teams.
Yes. The Companies Act, 2013, allows NRIs and foreign nationals to be appointed as directors in Indian companies.
At least one director must be a resident Indian (stayed in India for 182+ days in the previous calendar year).
Yes. They can own shares and even 100% equity in an Indian private limited company, subject to sectoral FDI limits.
| Query | Answer |
| Can an NRI invest in Indian companies? | Yes (under FDI regulations) |
| Can a foreigner hold 100% of Indian equity? | Yes (under automatic route) |
| Is RBI approval required? | Not in most sectors |
| Can NRI be both director and shareholder? | Yes |
FDI through the automatic route does not require prior RBI approval but must be reported via Form FC-GPR on the FIRMS portal.
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.
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:
| Nature of Payment | TDS Section | TDS Rate | PAN Required |
| Independent Director Fee | 194J | 10% | Yes |
| Executive Director Salary | 192 | As per slab | Yes |
| Without PAN | 206AA | 20% | Yes |
| Scenario | Allowed | Notes |
| NRI as Co-founder & Director | Yes | At least one Indian resident director required |
| Foreign national as Managing Director | Yes | Subject to board approval and compliance |
| 100% ownership by foreigner | Yes | Allowed in many sectors under FDI |
| Appointment without visiting India | Yes | Documents must be duly certified |
| Salary paid abroad in foreign currency | Yes | Through authorized channels under FEMA |
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.
| Area | Allowed | Notes |
| NRI/Foreign Director | Yes | With proper documentation |
| Managing Director Role | Yes | Subject to company approval |
| Independent Director Role | Yes | Subject to Schedule IV requirements |
| Salary/Remuneration | Yes | PAN and TDS compliance mandatory |
| 100% Foreign Shareholding | Yes | If sector permits automatic FDI |
Yes. The company can appoint an NRI as MD with proper board approval and salary structure.
Yes, under the automatic FDI route, this is permitted in most sectors.
Passport, address proof, consent form, photograph, and certified DSC. Documents must be apostilled or consularized.
Yes, provided PAN and TDS compliance is followed. Remuneration can be transferred abroad via FEMA-compliant methods.
It is not mandatory for appointment but required for receiving any income from the company.
For professional fees: 10% under Section 194J. For salary: as per slab under Section 192. Without PAN, 20% applies.
Yes. All documents can be sent digitally and certified properly — physical presence in India is not mandatory.
Yes, subject to eligibility criteria and registration with the Independent Director databank.
Yes. They can invest as shareholders under the FDI route and also serve as directors.
No. Most sectors are under automatic route — RBI approval is only needed in restricted sectors.
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