As India is attracting more FDIs you might want to know how an Indian company can have a foreign national as a director. This article explains everything.
FDIs bring with them not only investment but technical know-how, managerial expertise, and improved technology. With relaxed FDI norms, lower wages, and tax exemptions, India seems an attractive destination to invest in.
Firstly, let’s see who a director is a company is an intangible and invisible person whose duties and functions are entrusted to people called the director of a company.
The Companies Act, 2013 allows foreigners to become directors of Indian companies. A foreign individual can become an executive or a non-executive/independent director of Indian companies whether private, public, listed, or unlisted. A foreign director holds the same duties and roles as an Indian director.
Documents Required to Incorporate an Indian Company with a Foreign Director
(1) Digital Signature Certificate (DSC): To ensure a safe and secure electronic verification, one must obtain a DSC.
(2) Director Identification Number (DIN): It is an 8-digit unique number that has lifetime validity. Through DIN, the details of all the directors are recorded in a database.
As already mentioned above, if the proposed director already has a DIN, the same needs to be furnished. If not, you can apply for a DIN by filling out the SPICe form in the MCA portal. Allotment of DINs to the proposed first directors for incorporating a new company, including pvt ltd company registration, is made only through the SPICe form. A fee of Rs.500/- is chargeable for the application of DIN.
Documents needed for the application of DIN
- Passport size photographs
- As identity proof, a notarised and apostilled copy of the passport (passport is mandatory for foreign nationals)
- As an address proof, a notarised and apostilled copy of the driving license, passport, or utility bills like telephone bill, electricity bill
- And if the proofs are in a language other than Hindi/English, the proofs are to be duly translated to English by a certified translator or a notary public of home, under its seal.
(3) A Declaration stating that the applicant is not disqualified from becoming a director has to be furnished along with the DIN.
(4) DIR-2 (consent from Directors) shall be filed to the ROC within 30 days from the date of his/her appointment.
Checklist for Incorporating Indian Company with a Foreign Director
- Self-attested documents, and passport of the proposed director notarised and apostille in the home country. In case of non-availability, the notary can be obtained in India.
- If the individual already holds a DIN, it is to be cross-checked if the same was obtained through prescribed laws. Also, the details of directorship with other companies need to be checked as well. If he/she doesn’t have a DIN, you can apply for it in India.
- In case the foreign director holds shares in the company, its details and specifications are to be furnished.
Things to Note for Incorporation of Company
- Foreign directors intending to become a whole-time or managing director must fulfill the criteria of being a resident of India (someone who has stayed in India continuously for not more than 12 months, immediately before the appointment as a director). This requirement is a key aspect of the Indian company registration process.
- They should be aged between 21 – 70 years
- Further, they should not be insolvent, convicted of an offense
- They shouldn’t be sentenced to more than 6months of imprisonment
- The company must have an Indian or an Indian resident on its board of directors
- Foreign nationals can be appointed as an independent director if he/she possesses skill or expertise in a certain field related to the company’s business
- The proposed director must hold a valid employment visa.
Incorporation of a company by oneself must be overwhelming. That’s when the services of Vakilsearch come in handy. They ensure smooth processing of documents and successful registration of your company.
