Introduction
Incredible In terms of NRI and OCI business startups, India has emerged as the top destination. India currently has the fastest-growing economy and has been continuously developing for decades. India is a fantastic location to launch a new company. Presently, the manufacturing industry is expanding and supported by a pool of abundantly available skilled labor. Additionally, consumer demand is still high, which attracts investors to set up businesses in India and make investments there
Additionally, the government has long worked to make things simple for both NRIs and OCIs in order to promote India as a country where doing business is “Easy.” The Foreign Investment Promotion Board (FIPB) was established by the Ministry of Commerce and Industry to get around all the barriers to doing business in India and guarantee easy sailing for all prospective foreign investors.
How can an NRI come to India to conduct business?
The best business structures for non-resident Indians to register a business under in India are as follows:
- Private Limited Partnership
- Limited Liability Company
However, the private limited company registration in India may be thought of as the best sort of business that may be created in India in the case of “Non-resident Indians” (NRI) and Overseas Citizens of India (OCI).
The reasons for opting to register a private limited company in India as an NRI or OCI
- Starting a private limited business requires just two stockholders.
- Due to their unique legal structure and capital requirements, private limited firms are seen to be especially suitable for non-Resident Indians.
- In comparison to public limited companies, private limited companies have substantially easier compliance requirements.
- Directing foreign investments into a private limited business is not subject to prior government or Reserve Bank of India permission.
Pre requisites for forming a private limited company in India
- 2 directors
- 2 shareholders
- An Indian business address. (At least one of the directors must reside in India.)
- One must receive a Directors Identification Number (DIN) and a Digital Signature Certificate (DSC) in order to serve as a director of an Indian corporation. The DSC must be used to sign the majority of the forms submitted to the Registrar of Companies (ROC).
- The identification evidence, address proof, and documentation proving Indian ancestry are needed for an NRI to register as a Private Limited Company or Public Limited Company. Each and everyone of these papers must be authenticated by the Indian embassy or a notary public.
NRI and OCI Company Registration in India: FEMA Regulations
- According to the regulations published under the Foreign Exchange Management Act, 1999, the government approved NRIs as acceptable entities for investment in order to facilitate foreign investment in India.
- According to India’s existing FDI/FEMA regulations, NRIs include people who live outside of the country yet are Indian citizens or people of Indian ancestry.
- NRIs have several ways to invest in India, including buying shares of Indian corporations, contributing to the capital of any existing company, or setting up a brand-new enterprise there.
The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) requirements, 2017, Schedule 4 describes the FEMA requirements for NRIs and OCIs intending to invest and form a company in India.
How to register a company in India as an NRI or OCI
In India, forming a private limited corporation is entirely done online. The MCA has switched over to a new web form called SPICe+ (SPICe Plus) to replace the older SPICe form. Consequently, it is now considerably simpler to incorporate a private limited company.
You can now incorporate a private limited company with a single application for name reservation, incorporation, DIN allocation, mandatory PAN and TAN issuance, EPFO and ESIC enrollment, profession tax (Maharashtra), and bank account opening.
SPICe+ is split into two sections.
1. Part A: Fill out Part A of the Spice+ form to request the firm name reservation. It can be used to register a company simultaneously and get permission for the proposed company’s name.
2. Part B: Apply for the following services in Part B of the Form Spice+.
- Incorporation
- DIN allocation
- Mandatory issue of PAN
- Mandatory issue of TAN
- Issue of an EPFO registration is required.
- Issue of ESIC registration is required
- Registration for the profession tax is required in Maharashtra
- Opening a bank account for the business and receiving a GSTIN, if applicable, are requirements.
You have two options: either submit Part-A first to reserve a name, then Part-B for incorporation and other services, or submit Part-A and Part-B simultaneously to incorporate a new company and take advantage of the following services.
Documents required for Company registration in India by Non Resident Indians (NRI)
For companies registered in India, is there a tax obligation on profits received from non-residents (NRI)?
Taxes must be subtracted from dividends paid to non-resident stockholders at the rates in effect under Section 195 of the IT Act.
- Dividends given to non-residents are subject to a withholding tax rate of 20% (plus any relevant surcharge and cess) under the Finance Act.
- However, the withholding tax rate specified in the relevant Double Taxation Avoidance Agreement (DTAA) for taxing dividends would be applicable if the non-resident shareholder is a resident of a country with which India has entered into a DTAA and the non-resident is eligible to benefit from the provisions of such DTAA.
