A Foreign National need not be a resident to start a business in India, and there are several ways to set up a new business in India as:
Limited Company
A company in India can be incorporated by a Non-Resident Indian as a Private Limited, a Public Limited or a Wholly Owned Subsidiary (WOS) under the Companies Act, 2013.
In Limited Companies, Foreign Direct Investment (FDI) is freely permitted subject to the FDI Policy in almost all sectors. Under the FDI Scheme, non-residents can make investments in shares/convertible debentures/preference shares issued by an Indian company through two routes:
Limited Liability Partnership (LLP)
LLP is a form of business that combines the features of both partnership and the company and can be incorporated under the Limited Liability Partnership Act, 2008
In the Limited Liability Partnership, Foreign Direct Investment (FDI) is freely permitted subject to the FDI Policy in almost all sectors like Limited Companies.
Branch Office / Liason Office / Project Office
Business operations can be established in India by the business entities registered outside India (“Foreign Company”) without creating and registering a limited company or limited liability partnership.
A foreign company can open a Branch Office/Liaison Office/Project Office in India subject to the RBI guidelines. The scope of business operations in such offices is usually limited to its projects, activities and functions such as country representative office, sourcing, technical and/or marketing support, import and export, etc
Documentation
The documentation process varies with the chosen Business type. As per Hague Convention guidelines, a document must be notarized/apostilled/attested by the Indian Embassy in their respective countries, if executed outside India or a copy of the document produced from outside India
Application to respective Authorities for registration in India
An application is required to be filed with the Registrar of Companies (“ROC”), Ministry of Corporate Affairs, both in case of Limited Companies and Limited Liability partnerships,
An application is required to be filed with the Reserve Bank of India and after obtaining the approval from the RBI, the entity is required to be registered with Registrar of Companies (“ROC”), Ministry of Corporate Affairs in case of Branch office / Liaison Office/ project office
General Information/ Documents Required for Foreign National:
- Directors’ Identification Number, if already obtained from Registrar of Companies in India
- Copy of valid Passport
- Copy of Address Proof such as Telephone Bill / Mobile Bill/Electricity Bill / Bank Account Statement must be in the name of foreign national and should not be older than 2 months.
- Valid Mobile Number
- Valid Email ID
Obtain the Registration and proceed to Business Start-up Formalities
- Once the Business Entity Registration is obtained, the business can initiate the below steps:
- employing resources
- to open a bank account
- to start its business operations
Along with the above, the business is also required to obtain other mandatory registrations such as
- Goods and Service Tax Registration (GST),
- Professional Tax and
- Shops and Establishment Registration etc.
