Can NRIs Start a Company in India – Full Process

A thousand miles away from the homeland, as you traverse through the hustle and bustle of foreign lands, there’s a piece of you that yearns for a connection with India.

You may be an NRI (Non-Residential Indian), but your Indian roots pull you back towards opportunities that the burgeoning Indian economy presents.

One such opportunity is the possibility of starting a company in India.

If you’ve found yourself wondering, ‘Can NRIs start a company in India?’ – we’re here to tell you, ‘Absolutely, yes!’

India, with its expansive consumer base and rapidly digitizing economy, presents a fertile ground for businesses.

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But how does an NRI navigate through the maze of laws and regulations to set up a company?

Worry not! This guide is here to simplify the process for you.

Let’s embark on this journey of turning your entrepreneurial dreams into reality!

1. The Legal Landscape: Companies Act 2013

To start with, let’s address the elephant in the room – the legal aspects. Thankfully, the Companies Act 2013 has made the process of setting up a company by NRIs quite straightforward.

NRIs can invest in India in almost all sectors and industries (except a few like real estate, agriculture, plantation, and print media) without any prior approval from the government.

This also includes starting a new company or business venture.

2. What Type of Company Can You Set Up?

NRIs can set up any type of company in India – a Private Limited Company, Public Limited Company, Limited Liability Partnership (LLP), or even a Sole Proprietorship.

However, the most common and preferred choice is a Private Limited Company due to its ease of setup, limited liability, and favorable taxation policies.

3. The Process of Setting up a Company: Step by Step Guide

Step 1: Acquiring Digital Signature Certificate (DSC)

To file the company registration documents online, the directors of the company need to obtain a Digital Signature Certificate. NRIs can apply for DSC either through a franchise or directly from a government-recognized Certifying Authority.

Step 2: Applying for Director Identification Number (DIN)

Every director of the company needs to have a Director Identification Number (DIN). NRIs can apply for DIN by filling out Form DIR-3 on the Ministry of Corporate Affairs website. The form should be accompanied by identity and address proof.

Step 3: Name Approval

Before registering your company, you need to ensure that your company’s name is unique. You can apply for name approval by submitting the RUN (Reserve Unique Name) form on the MCA website.

Step 4: Incorporation of the Company

Once the name is approved, the next step is to file the incorporation application.

This is done by filling out the SPICe+ form and attaching necessary documents, like the Memorandum of Association (MoA), Articles of Association (AoA), a declaration from the directors and subscribers, and proof of office address.

Step 5: PAN, TAN, and Bank Account

Post-incorporation, the company needs to apply for a Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and open a company bank account.

4. Funding the Company: Show Me the Money!

When it comes to funding the company, NRIs can do so through their Non-Residential External (NRE) or Non-Residential Ordinary (NRO) accounts under the automatic route, which doesn’t require any prior permission from the Reserve Bank of India (RBI).

The funds must be remitted through normal banking channels or debit to NRE/NRO/FCNR account.

5. Regulatory Compliances: The Rule Book

It’s essential to keep in mind the regulatory compliances for an NRI-run company in India. This includes regular filing of returns, maintaining proper books of accounts, auditing, and so forth. Non-compliance can result in penalties, so it’s wise to have a competent accountant or legal counsel to handle these aspects.

6. Bringing It All Together: Setting up a Team

Last but not least, you’ll need a reliable team in India to manage your business. This might involve hiring local talent or creating a partnership with someone you trust.

Setting up a company in India as an NRI might seem like a challenging endeavor, but it’s a journey filled with opportunities and potential rewards.

The Indian market is ripe for growth and innovation, and there has never been a better time to invest in your entrepreneurial dreams. So, go on, take the plunge, and make your mark in the Indian corporate landscape.

Your entrepreneurial journey awaits you!


1. What sectors are off-limits for NRIs to invest in India?

While NRIs can invest in almost all sectors, some sectors like real estate, agriculture, plantation, and print media require government approval or are completely restricted.

2. Can an NRI be a director in an Indian company?

Yes, an NRI can be a director of an Indian company. However, at least one director of the company must be a resident in India.

3. Do I need to be present in India for setting up a company?

No, the entire process can be completed online. However, you may need to have someone trustworthy in India to assist with the process, including documentation.

4. Can an NRI invest in a startup in India?

Yes, NRIs can invest in Indian startups either directly or through venture capital funds.

5. How much minimum capital is needed to start a company in India?

There is no minimum capital requirement for starting a Private Limited Company in India.

6. Can I repatriate the profits made by my company in India?

Yes, post payment of applicable taxes, NRIs can repatriate the profits earned by their companies in India.

7. Can I fund my company through my Foreign Currency Non-Resident (FCNR) account?

Yes, NRIs can fund their Indian companies through their NRE, NRO, or FCNR accounts.

8. Do I need to obtain any specific approvals for setting up a company in India as an NRI?

As long as you’re investing in sectors under the automatic route, no specific approval is required. However, for sectors under the approval route, you need to obtain permission from the government.

9. What are the tax implications for an NRI owning a company in India?

The company will be liable to pay tax on its profits as per the Indian tax laws. Additionally, dividend distribution may also be subject to tax. It is advisable to consult a tax expert to understand the complete tax implications.

10. Can a foreign national be a director of a company in India?

Yes, a foreign national can be a director of an Indian company, given that they comply with the necessary provisions stated under the Companies Act, 2013.

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