Foreign Nationals Director in Indian Company

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Reading Time: 3 minutes| (Last Updated On: October 30, 2019)

Foreign Nationals Director in Indian Company

A Private limited company registration in India other than a one person company has to have a minimum of two directors. A director is an individual occupying the position of a director called by whatever name. It is quite possible that the director may be a foreigner. The question here arises whether or not a foreigner can be appointed as a director in an Indian company/ Foreign Nationals Director in Indian Company.

Foreign Nationals Director in Indian Company

The Companies Act, 2013 (the Act) does not explicitly define a foreign resident/foreigner. An Indian citizen, as well as foreigner, may be treated like a foreign resident if he or she has not been staying in India for 12 months continuously immediately preceding the date of his or her appointment as a director. (Schedule V). Foreign Nationals Director in Indian Company

However, the period of 182 days stay in India is relevant to call a person resident or non-resident. If a person has stayed in India for 182 days in the immediately preceding year he shall be called a resident. A foreign citizen staying in India for 12 months may enjoy all rights under the Act but the same rights are not available to a Non-resident Indian (NRI) citizen.

Yes foreigners can be directors in an Indian company provided that at least one of the directors is a national of India 
The Director should be above 18 years of age and must be a natural person. There are no restrictions in terms of citizenship or residency. Therefore, NRI or foreign nationals can be directors in an Indian Private Limited Company. But at least one of the directors in the board of directors must be a resident of India. There is no restriction on the appointment of an NRI or foreign national as a Director of a private limited company Registration in India and the procedural requirement are almost the same as they would be for the appointment of an Indian citizen. An NRI or foreign director may be an executive or non-executive director.

However, there are some points that need to be watched out for: Can NRI foreign nationals director Private Limited Company
1. As per 266A of the Companies Act, every individual, who wants to be appointed as director of a company should apply for a Director Identification Number (DIN) to the Registrar of Companies (ROC) in the prescribed DIN Form [DIN-I form]. If such a director happens to be a foreign national, details of a valid passport should be provided in form DIN-1 and a certified copy of the passport should be attached with DIN application. All supporting documents including photograph should be certified by the Indian Embassy or a notary in the home country of the applicant. It may also be certified by the Managing Director / CEO / Company Secretary of the company registered in India, in which the foreigner is a director. In case the foreign director has a valid multiple-entry Indian visa or PIO card or OCI card, then he could also get it attested by Public Notary / Gazetted Officer in India or practicing Chartered accountant or company secretary in practice.

2. If you are appointing a foreign national as a managing director of a private limited company, the appointment would be governed by Section 269 of the Companies Act subject to the rules given in Schedule XIII to the Act that defines qualification for appointment and ceiling limits of remuneration.

The term ‘Resident’ is a person who has been staying in India for a continuous period that is not less than 12 months preceding the date of appointment. It also says that the purpose of coming to India must be either for taking up any employment in India or (2) for carrying on a business /vocation in India.

If the foreign national to be appointed does not meet the time required in order to be called as a resident, permission will have to be taken from the Government. Permission will also be necessary if the remuneration is beyond limits set by Schedule XIII. Can NRI foreign nationals director Private Limited Company.

Thus an NRI or foreign national can be appointed as a director/subject to rules given in the relevant acts. Nowadays it is usually seen that foreign nationals run Indian entities from overseas through Indian directors. So it is an endeavor of the Ministry of Corporate Affairs that such directors fulfill the rules so as to ensure transparency in running of the business. SetIndiaBiz can help register a Private Limited Company Registration in India.

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2 Comments

  1. what will be the consequences if nri incorporated the privated limited company as resident. however one of the director is residentin this cases.

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