Foreign Direct Investment (FDI) in India: Company Registration Rules for NRIs (2024 Guide)
India’s booming economy and liberal FDI policies make it a prime destination for Non-Resident Indians (NRIs) and foreign investors to start businesses. However, company registration involves specific FDI compliance, RBI approvals, and tax considerations.
This guide explains how NRIs can register a company in India, FDI rules, and key legal requirements.
Can NRIs/Foreign Nationals Register a Company in India?
✅ Yes! NRIs/foreigners can own 100% of Indian companies in most sectors (except prohibited ones like gambling, real estate).
Allowed Business Structures for NRIs
Private Limited Company (Most popular for startups)
LLP (Limited Liability Partnership)
Subsidiary Company (Foreign parent company ownership)
Prohibited Structures:
❌ Sole Proprietorship (Only for Indian residents)
❌ Partnership Firm (Unless with Indian partners)
FDI Rules for NRIs Registering a Company
1. Automatic Route vs. Government Approval
| Sector | FDI Limit | Approval Needed? |
|---|---|---|
| IT, Manufacturing, E-commerce | 100% | No (Automatic Route) |
| Defense, Telecom | 74% – 100% | Yes (Govt. Approval) |
| Insurance, Pension | 49% – 74% | Depends on % |
Note: NRIs from Pakistan/Bangladesh need prior government approval.
2. Capital Requirements
No minimum capital for Private Limited/LLP (₹1 lakh recommended).
FDI must be reported to RBI via:
Single Master Form (SMF) – For new investments.
Annual Return on Foreign Liabilities (FLA) – If NRI ownership > 10%.
3. Taxation & Repatriation
✔ Corporate Tax: 25-30% (same as Indian companies).
✔ Dividend Tax: 20% (plus surcharge if applicable).
✔ Repatriation of Profits: Allowed after taxes (via LRS scheme).
Step-by-Step Company Registration for NRIs
Step 1: Choose Business Structure
Private Limited (Best for fundraising)
LLP (For professional services with lower compliance)
Step 2: Obtain DSC & DIN
Digital Signature Certificate (DSC) – Apply via Indian Certifying Authorities (NSDL/eMudhra).
Director Identification Number (DIN) – File Form DIR-3 with:
Passport copy (notarized/apostilled)
Overseas address proof
Step 3: Reserve Company Name
Submit 1-2 names via MCA’s RUN service (avoid sensitive words like “Global/International”).
Step 4: File SPICe+ Form (INC-32)
Submit:
MOA & AOA (with NRI director details)
Registered office proof (can be rented)
NRI documents (passport, visa, overseas address)
Step 5: Comply with RBI/FEMA
Single Master Form (SMF) – Report FDI within 30 days of incorporation.
Foreign Assets & Liabilities (FLA) Return – If NRI ownership > 10%.
Step 6: Open NRI Bank Account
NRE/FCNR account for capital infusion.
Current account for business transactions.
Timeline: 15-20 days (if documents are accurate).
Post-Incorporation Compliance for NRI-Owned Companies
| Requirement | Due Date |
|---|---|
| Annual ROC Filings (MGT-7/AOC-4) | Within 60 days of AGM |
| RBI FLA Return | July 15 every year |
| Income Tax Return (ITR-6) | September 30 |
| GST Returns (if applicable) | Monthly/Quarterly |
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✔ Expertise in FDI Compliance – SMF, FLA, and FEMA filings handled.
✔ Dedicated NRI Support – Assistance with bank accounts, taxation, and repatriation.
✔ Fast-Track Registration – Get incorporated in 10-15 days.
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Frequently Asked Questions
1. Can an NRI be the sole director of an Indian company?
Yes, but at least one resident Indian director is mandatory.
2. Is a physical office required?
No, a virtual office or coworking space address suffices.
3. Can an NRI invest via an overseas company?
Yes, but additional FDI reporting (Form FC-GPR) is required.
4. Are NRI-owned companies eligible for Startup India benefits?
Yes, if incorporated as a Private Limited/LLP and meet DPIIT criteria.