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Setup a business in India BY Any person can start their business in India. There is no restriction in doing business here by anyone, viz., Non Resident Indians (NRI), Foreign Citizens, Overseas Citizen of India card holder (OCI), Person of Indian origin (PIO). Numbers of options are available for foreign nationals to set up a business in India, but most popular forms are Private Limited Company and Limited Liability Partnership.

Private Limited / Limited Company: The minimum requirements for starting a Private Limited Company are to have 2 directors, 2 shareholders and an office address in India. However, one of the directors must be an Indian Citizen and an Indian Resident. The most preferable model of company formation in India by a foreign national is with 3 directors, i.e., two foreign nationals and one Indian resident. As there is no minimum requirement for Indian shareholding, 100% share of such company can be held by foreign citizens.Main points to be noted by a foreign national before setting up a Private Limited Company in India are:-

  1. DSC for directors
  2. All the documents and photograph in the application of foreign national need to be Notarised/Apostilled in their home country. If the documents are not in English, then it needs to be translated into English by the official translator and to be notarised (Documents include Passport along with an address proof. Address proof may be driving license, bank statement, etc.

Limited Liability Partnership: Like Private Limited Company, LLP also require minimum of two persons and one must be an Indian Citizen or Indian Resident. All the points in the formation of a Private Limited Company required to be noted for setting up a LLP in India by foreign national, like attestation of documents, FDI, etc.


Q: I am a US Passport holder; can I own a company in India?

Yes, you can very well own a company in India (partly or even wholly) or set up your own company in India. Setting up or owning a company in India can broadly be achieved with the following options.

Q: I am a US Passport holder; can I own a company in India?

In case of a closely held company (Private Limited, Limited Liability Partnership) procedures of valuation of shares, documentation of shares transfer and reporting to Reserve Bank of India need to be carried out.

Q: What is the owner of company called in India?

Shareholders are owner of the company and enjoy rights based on their shareholding percentage. ‘Director is a legal position who takes care of operational activities and also represents to various legal authorities governing the business. In order to become a Director it is not required ‘to become a Shareholder. A shareholder however can also be a Director. You can also be appointed as a Director in an Indian company wherein you are not a shareholder/owner. Generally, owner/shareholders of business retain the position of Director as well to take important decision of the business. One can however also appoint any other person to work as a Director on their behalf.

Q: Do I need an Accountant or Consultant to start my business (buying shares or starting own company) in India?

Yes, apparently, you cannot do it yourself. You must hire an accountant or consultant to take care of entire process of setting up of your business.

Q: What are prerequisite to become Director in an Indian Company?

The process starts from getting a Director Identification Number (DIN) in India. In order to obtain DIN, the person must prepare his/her Digital Signature (DSC). In order to prepare DSC and DIN, one needs to arrange Appostile or Legalised Identity Proof (Passport), Address Proof (Bank Statement, Countries Identity Card etc), DSC Form and few Photographs.

Q: What are prerequisite to become a Shareholder in an Indian Company?

None of typical registrations (Tax, DIN etc) are required to become a shareholder in an Indian company. You need to however prepare a DSC (New Process of Company Registration at MCA) and you need to arrange Appostile or Legalised Identity Proof (Passport), Address Proof (Bank Statement, Countries Identity Card etc), DSC Form etc and few Photographs.

Q: Are there any other formalities to be fulfilled to become a Director in Indian Company?

For Indian passport holder there is a formality to obtain a Permanent Account Number (PAN) from Income Tax Authorities. A Foreign National, Foreign.

Q: Do I need to be present in India in during the process of setting up my business?

It is not necessary to be present in India for being appointed as a director or a shareholder. Similarly, the entire process of business registration can be done online and there is no requirement to travel to India or be present physically at any stage. In case you are travelling India on a business visa, you can sign all the documents during your India visit. Such documents would not be required to be appostile or legalised in your home country. In other case, one can arrange to post the stated documents (duly signed, apostilled, legalised), to their hired accountant, consultant in India, who can handle the entire process of obtaining DIN, DSC and coordinate in filing the required form at Registrar of Companies.

Q: Is there any local partner (Indian Resident) required by Indian Law?

Companies Act 2013 brought a new provision wherein there must be at least 1 Resident Director in Board of an Indian Company. Resident director is defined as a citizen of India which has resided at least 180 days in a calendar year.

Responsibilities of the resident director are primarily to coordinate with the local government authorities, as and when there is any requirement. He may or may not be involved business decisions or even operational matters. From legal side, there is no predefined remuneration for such director.

Q: Can I own 100% equity in Indian business (existing or new)?

Companies Act 2013 allows a Foreign National, Foreign Resident, Non Resident Indian`s (NRI), Person of Indian Origin (PIO) or their business entities overseas to own 100% equity in their business set up in India.

Q: Can I open a Single person/ One person company (OPC) in India?

NRI /COI/ PIO`s, Foreign Nationals are not eligible to form a OPC in India. Companies Act 2013 allowed a new concept to form a single person company called ‘’One Person Company (OPC)’, however its only allowed for a Resident Indian.

Q: Is there any minimum capital requirement to start a business in India?

There is no minimum required share capital. Recently, the Companies Act 2013 removed the minimum authorized share capital limit (INR 100K for a Private Limited Company, INR 500K for a Public Limited Company).

Q: Is there any restriction in starting a Partnership Firm, Limited Liability Partnership (LLP) or buy shares therein?

You can do the same, if the following conditions are met Indian Partnership Firm should not be engaged in agricultural, plantation, real estate, media businesses (restricted sectors). Amount can only be invested by way of inward remittance or out of NRE, FCNR or NRO accounts maintained with authorized Banks. Repatriation of invested fund outside India, not permitted unless permitted by Reserve Bank of India (RBI).

Q: What are further formalities for making the business operational?

Once the legal structure of business (Private Limited Company, Limited Liability Company, Limited Liability Partnership etc) is registered, following activities need to be completed: Registration with Income Tax Authorities: Obtain Permanent Account Number (PAN), Tax Account Number (TAN).