How Foreigners Can Register a Company in India Without an Indian Partner

Introduction

Foreign nationals can establish a business in India without involving an Indian partner. India’s liberal Foreign Direct Investment (FDI) policy permits 100% foreign ownership in many sectors. This guide outlines the process, legal requirements, and benefits of setting up such a company.

What Does It Mean to Register a Company Without an Indian Partner?

Registering a company without an Indian partner means that a foreign individual or entity owns 100% of the company’s shares in India. This is permissible under the automatic route of FDI in several sectors, eliminating the need for prior government approval. For detailed information, refer to the Reserve Bank of India (RBI) guidelines and the Ministry of Corporate Affairs (MCA) portal.

What Are the Common Structures Available?

Note: The choice of structure depends on the nature of the business and long-term objectives.

How to Register a Company in India Without an Indian Partner?

1. Choose a Business Structure: Select between a Private Limited Company or Wholly Owned Subsidiary based on business needs.
2. Obtain Digital Signature Certificate (DSC): Required for proposed foreign directors to sign electronic documents.
3. Apply for a Director Identification Number (DIN): Mandatory for individuals intending to become directors in an Indian company.
4. Reserve Company Name: Use the RUN (Reserve Unique Name) service on the MCA portal to reserve a unique company name.
5. Draft Legal Documents: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA). Documents must be notarized and apostilled in the home country.
6. File SPICe+ Form: Submit the SPICe+ form for company incorporation, which includes applications for PAN, TAN, GST, EPFO, and ESIC.
7. Open a Bank Account in India: Use the Certificate of Incorporation and KYC documents to open a current account.
8. Report FDI to RBI: File Form FC-GPR on the FIRMS portal within 30 days of receiving foreign investment.
9. Register for Taxation: Apply for GST registration, Professional Tax, and Shop & Establishment license, as applicable.

What Documents Are Required?

• Passport of foreign directors
• Address proof (utility bill or bank statement)
• Business visa (if applicable)
• Notarized and apostilled board resolution (for foreign companies)
• Memorandum of Association (MOA) and Articles of Association (AOA)
• Signed declaration from directors

What Are the Key Benefits?

1. 100% Ownership: Foreign investors can fully own the company without Indian partners.
2. Access to the Indian Market: Entry into one of the world’s fastest-growing economies.
3. FDI-Friendly Sectors: Many sectors allow automatic route investments.
4. Legal Identity: A registered company enhances credibility and trust.

Are There Any Challenges?

1. Apostille and Notarization: Mandatory for foreign documents, which can be time-consuming.
2. Resident Director Requirement: At least one director must reside in India for a minimum of 120 days in a financial year.
3. Language Barriers: Potential issues during compliance and documentation processes.
4. Compliance Requirements: Regular filings, tax audits, and adherence to Indian laws are mandatory.

What Compliances Must Be Followed?

• Filing of Form FC-GPR: Within 30 days of share allotment.
• Annual ROC Filings: Submit annual returns and financial statements to the MCA.
• Income Tax Returns: File annually with the Income Tax Department.
• GST Returns: If registered under GST, file monthly/quarterly returns.
• Statutory Audit: Conduct annual audits and hold board meetings as per the Companies Act.
• Appointment of Statutory Auditor: Within 30 days of incorporation.

Real-life Example

A U.S.-based technology company established a 100% foreign-owned private limited company in Bengaluru. The entire process, including document apostillation and compliance with Indian regulations, was completed in approximately 20 days. An Indian resident was appointed as a director to meet the residency requirement.

Fees and Timeline

Why Should Foreigners Choose Professional Assistance?

• Accurate Documentation: Ensures all paperwork complies with Indian laws.
• Regulatory Compliance: Assistance with RBI and FEMA regulations.
• Sector-Specific Guidance: Understanding FDI restrictions in specific sectors.
• Post-Incorporation Support: Services like GST registration and accounting.

Conclusion

Establishing a company in India without an Indian partner is legally feasible and increasingly common. With 100% FDI permitted in many sectors, foreign entrepreneurs can confidently venture into the Indian market. Adhering to the correct procedures and compliance requirements is essential to ensure smooth operations.

Suggested Read :

Renewal Process of FCRA registration

Challenges of Company Setup in India from USA

Foreign Subsidiary Company Compliance in India

Appoint a Foreign Director in Indian Company

Appoint an NRI Director in Indian Company

FAQs