Private Limited Company Registration for NRIs

Can an NRI Register a Company in India?

Yes, and NRIs have an option foreign nationals do not. An NRI or OCI holder can invest in an Indian company either on a repatriable basis, which is treated as foreign investment with RBI reporting, or on a non-repatriable basis, which is treated as domestic investment with materially lighter compliance. The choice depends on whether you want to take the money back out of India later. Make it before you incorporate, because switching afterwards is not simple.

The decision that comes first

Repatriable investment. Funds come in through normal banking channels or from an NRE account, and the investment is treated as foreign direct investment. You can repatriate the proceeds later, subject to conditions. The company must report the share issue to the RBI in Form FC-GPR through the FIRMS portal within 30 days of allotment, and FEMA pricing rules apply.

Non-repatriable investment. Funds come from an NRO account, and under the relevant schedule of the Non-Debt Instruments rules the investment is treated as domestic investment rather than foreign investment. Compliance is materially lighter, and sectoral caps that apply to foreign investment generally do not bite in the same way. The trade-off is in the name: the capital is not freely repatriable.

Ask yourself one question. Is this money you may want to take out of India, or money you are deploying in India for good? Answer that, then choose the route.

What makes an NRI incorporation easier than a foreign national’s

Most NRIs already hold an Indian PAN, which removes a step. Documents are usually familiar, and attestation requirements are often lighter than for a foreign national, though documents executed abroad will still need attestation at an Indian embassy or consulate, or notarisation or apostille, depending on where you are.

An NRI can also be the resident director, if they have actually stayed in India for 182 days or more in the financial year. If you do not meet that, you need a co-director who does.

The process

  1. Decide the investment route, repatriable or non-repatriable.

  2. Confirm the resident director. At least one director must satisfy the 182-day test. If no founder does, appoint someone who does.

  3. Obtain digital signatures for every director and subscriber, including those abroad.

  4. Get documents attested where they are executed outside India.

  5. Reserve the name through SPICe+ Part A.

  6. File SPICe+ Part B with e-MOA, e-AOA, INC-9 and AGILE-PRO-S.

  7. Receive the Certificate of Incorporation with CIN, PAN and TAN.

  8. Open the bank account and bring in the subscription money through the correct account type for your chosen route.

  9. Allot shares, and file FC-GPR within 30 days where the investment is on a repatriable basis.

Mistakes NRI founders make

  • Using the wrong bank account. Funding from an NRE account versus an NRO account determines which route your investment falls under. Getting this wrong is not a paperwork error, it changes your regulatory position.

  • Assuming the resident director rule does not apply. It applies to every company, including one owned entirely by NRIs.

  • Missing FC-GPR. Where the investment is repatriable, the 30-day clock runs from allotment, not from when the funds landed.

  • Overlooking tax residency. Being a director or shareholder of an Indian company has tax consequences in India and possibly where you live. Take advice on both sides before you structure the shareholding.

How Northrop LLP helps

Northrop LLP advises on the route choice first, because it is the decision everything else follows from, then handles incorporation, bank account coordination, RBI reporting where applicable and ongoing compliance.

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