As India is one of the fastest-growing economies globally, it tends to attract huge amounts of investment from all over the world. As indicated by a new report by Nomura, a Japanese Brokerage firm, Foreign Direct Investment into India will probably have hit a high of $34.9 billion in the financial year 2015, a monstrous 61.6 percent hop from $21.6 billion in the past financial year. With the world's second-biggest populace and an enormous ability pool of talented IT experts, India keeps on being an attractive investment opportunity among foreign companies and foreign nationals. In this article, we give a thorough manual for Indian Private Limited Company and how it works for foreign nationals.
Registration or incorporation of a private limited company is the simplest and quickest sort of India section procedure for foreign nationals and also foreign companies. Foreign Direct Investment of up to 100% into a private limited company is under the automatic route, wherein no Central Government consent is required. Therefore, incorporation of a private limited company, though in the form of a wholly-owned subsidiary of a foreign company or joint venture is one of the cheapest, easiest, fastest entry techniques for foreign nationals or foreign companies.
Foreign Direct Investment (FDI) to an Indian Private Limited Company or Limited Company is permitted up to 100% in almost all sectors. There are very few sectors that require prior Central Government approval for investment by a foreign company or foreign national. The below mentioned are some of the sectors that require Government Approval for investment by a Foreign Company or Foreign National:
When a company is registered with one or more of its directors being foreign nationals, the following things need to be checked:
The details of the proposed directors along with self-attested documents and passports are required in case of foreign directors duly notarized and apostille in the home country. However, in case of non-availability of notary and apostille in the Home Country, it is then important to get it duly notarized in India.
The attestation here could also be done by a Public Notary / Gazetted Officer in India or a Practising Company Secretary / Practicing Chartered Accountant if a foreign director has a valid multiple-entry Indian visa or he is a POI (Person of Indian Origin) card or OCI (Overseas Citizen of India card)
If DIN is already available: When a foreign national has a Director Identification Number (DIN), it needs to be cross-checked whether the DIN was obtained according to the prescribed company laws or not. With this, details of the directorship in other companies need to be checked as well.
If DIN is not available: In such circumstances where the foreign national does not carry a Director Identification Number (DIN), he/she may get it through India, according to the prescribed laws under the Companies Act, 2013.
Shareholding Pattern: In circumstances where the director also holds shares in the company, its details and specifications are required to be given.
By subscribing to the MOA & AOA, the shareholders (they might be either the foreign companies or foreign nationals or Indian companies or Indian nationals) show their interest in becoming a shareholder in the company to be registered or incorporated.
In such case, the signature of the foreign Director shall be verified by the public notary of that respective country or it can also be verified by the Officers of the Embassy. Furthermore, a copy of a valid business visa for India shall also be attached.
Below mentioned are some of the documents pertaining to the foreign entity subscribing to the shares of the Indian Company that shall be submitted:
Once the above documents are submitted along with the application for incorporation of a company, the Registrar will then issue a Certificate of Incorporation for the Indian Private Limited Company, only if the documents submitted are valid and acceptable.
Once the incorporation certificate is obtained, the Indian Private Limited Company will then apply for a PAN Card and will also take the necessary steps for opening a bank account for the respective company in India.
Foreign Direct Investment in a private limited company is one of the safest and easiest options for economic growth as a whole. Furthermore, the easy process established by the government and the Ministry of Corporate Affairs attracts foreign nationals to be a part of the company, thus leading to an increase in the overall growth of the country.