Company registration in India for foreign nationals and NRIs

Law

Companies Act 2013, FEMA 1999, NDI Rules 2019

Minimum

2 directors, 2 shareholders

Resident director

Section 149(3): 182 days in India

Typical time

3 to 6 weeks including document legalisation

Who can set up an Indian company from abroad

Any individual or company outside India can subscribe to shares of a new Indian private limited company, subject to the foreign direct investment (FDI) rules for the business it will carry on. Most services, technology, consulting, manufacturing and trading businesses fall under the automatic route, which means no government approval is needed before incorporation. A few sectors have caps or need approval, and investors from or beneficially owned in a country sharing a land border with India need government approval under Press Note 3 (2020). We cover those rules on our FDI and FEMA compliance page.

The structure matters for tax and reporting:

• Foreign individuals can hold shares directly. They cannot form a One Person Company, which is available only to Indian citizens.
• NRIs and OCI cardholders can invest on a repatriation basis, which is treated as FDI and reported, or on a non-repatriation basis, which is treated much like a resident investment.
• Foreign companies usually set up a wholly owned subsidiary, with a second shareholder (often a group company or a nominee) holding a single share. See Indian subsidiary setup.

The resident director requirement

Section 149(3) of the Companies Act 2013 requires every company to have at least one director who has stayed in India for a total of at least 182 days during the financial year. For a newly incorporated company the requirement applies proportionately for the part of the year. This is a residence test, not a citizenship test: a foreign national living and working in India qualifies, and an Indian citizen who lives abroad does not.

Founders who have no one in India usually choose one of three options:

• A trusted relative, partner or senior employee in India becomes a director.
• A professional resident director is appointed under a written agreement that limits his or her role and sets out indemnities and fees.
• A founder relocates to India for the first year, which also helps with banking and hiring.

A resident director carries real legal responsibility for filings and compliance. Choose someone you trust, give them board-level information, and record the arrangement in a service agreement and board minutes.

Signing and legalising documents where you live

Foreign directors and subscribers sign their identity and address documents before a notary in their own country. The notarised copies must then be legalised so they are accepted by the Registrar of Companies:

We send you a checklist with sample wording so the notary certifies the right thing the first time. Our apostille and attestation guide explains the stamps country by country.

DSC, DIN and the SPICe+ filing

Every director and subscriber signs the incorporation forms electronically, so each needs a Class 3 digital signature certificate (DSC). Licensed certifying authorities issue DSCs to foreign nationals after video verification and a check of the passport and address proof, which usually must be apostilled or consularised. The DSC is delivered on a USB token or as a cloud-based signature, so you do not need to travel.

The company is then incorporated through the integrated SPICe+ web form. Part A reserves the name; Part B covers incorporation, the director identification number (DIN) for up to three directors, PAN and TAN for the company, and registrations for EPFO and ESIC. The linked e-MoA and e-AoA are signed by each subscriber, and AGILE-PRO-S covers GSTIN (optional), the bank account and, in some states, professional tax. The certificate of incorporation carries the company's CIN, PAN and TAN.

What has to happen after incorporation

Incorporation is the start, not the finish. A foreign-owned company has a short list of deadlines in its first months:

• Bank account and share capital. Foreign subscribers remit the subscription money through banking channels to the company's account with an authorised dealer (AD) bank. The bank issues a foreign inward remittance certificate (FIRC) and KYC report.
• Allotment and FC-GPR. Shares are allotted at not less than fair value, and Form FC-GPR is filed on the RBI's FIRMS portal within 30 days of allotment, with a valuation certificate and the company secretary's declaration.
• INC-20A. The declaration of commencement of business must be filed within 180 days of incorporation, with proof that subscribers paid for their shares.
• First auditor within 30 days, statutory registers, share certificates within 60 days, and significant beneficial ownership declarations.
• Annual FLA return to the RBI by 15 July every year once the company has foreign investment.

Realistic timeline and costs

Government fees for a small private company are modest and depend on authorised capital and the state's stamp duty on the MoA and AoA. The larger costs are notarisation and apostille abroad, courier, DSCs, the valuation certificate and professional fees. We quote a fixed fee in writing, separated into incorporation, FEMA reporting and first-year compliance.

Plan on three to six weeks in total. Name approval and SPICe+ processing usually take one to two weeks once papers are ready; legalising documents abroad is what takes longest, especially in consular attestation countries. A foreign company needs a board resolution, its certificate of incorporation and constitutional documents, all legalised, which adds time.

Mistakes foreign founders make

• Remitting money before the bank account exists, or from a personal account of someone other than the subscriber, which complicates FC-GPR.
• Missing the 30-day FC-GPR window. Late filing attracts a late submission fee and, if ignored, compounding.
• Names that clash with existing trademarks, leading to rejection or a later rectification order.
• Choosing a resident director casually, without an agreement or proper access to information.
• Forgetting tax residence questions: a foreign founder who manages the company from abroad should take advice on where it is effectively managed.

Documents you need

For each foreign director and subscriber, and for the company itself:

• Passport, notarised and apostilled or consularised
• Overseas address proof such as a bank statement or utility bill not older than two months, legalised the same way
• Recent passport-size photograph, and email and mobile number for DSC verification
• For a corporate shareholder: certificate of incorporation, constitutional documents and board resolution, legalised
• For the resident director: PAN, Aadhaar and address proof
• Registered office proof in India: utility bill and owner's no-objection letter, with rent agreement if rented
• Proposed company names and a short description of the business activities

How we handle it for you

1. Structure call in your time zone

   We confirm the entry route, shareholding, resident director and tax points on a video call.

2. Legalisation checklist

   You receive exact notary wording and apostille or embassy steps for your country.

3. DSC and name

   Digital signatures by video verification, and name reservation through SPICe+ Part A.

4. Incorporation

   SPICe+ Part B, e-MoA, e-AoA and AGILE-PRO-S filed and followed to the certificate of incorporation.

5. Capital and FEMA reporting

   Bank account, inward remittance, allotment, FC-GPR and INC-20A completed on time.

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