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Private Limited (NRIs & Foreign Nationals with FDI)

All you need to know about establishing a Private Limited Company for Non Resident Indians and Foreign Nationals (With FDI) in India.
A Private Limited Company is the most popular as well as the most preferred choice of business entity in India. As it requires a minimum of 2 members, it is most appropriate for small and medium-sized businesses and start-ups. It is a privately held business entity with a limited liability and allows for a 100% foreign direct investment with government approval.
Non Resident Indian: Citizens of India, holding Indian Passport, immigrated to any other country for six months or more.
Foreign National: A person who is not a citizen of India.
Business entities like Private Limited Company and Limited Company only allow for Foreign Direct Investment (FDI) into India under the automatic route. NRIs and Foreign nationals are not allowed to invest or start a Proprietorship or Partnership or One Person Company in India, while FDI in LLP requires prior approval from the Reserve Bank of India. An interesting feature is that a Private limited company can be started with as less as two shareholders. The maximum limit may be two hundred shareholders. Compliances of a private limited company are much simpler compared to that of a Public limited company.
Note:
• For NRI’s and Foreign National below mentioned documents must be apostilled by Consulate of Indian Embassy or attested by Foreign Public Notary depending upon whether country is the member of Hague convention or not.
• For NRI’s and Foreign National Please make note that if the person belongs to country who is not the member of Hague convention than all the documents as mentioned above need to be apostilled by Consulate of Indian  Embassy. And if the person belongs to the country who is the member of Hague convention than all the documents as mentioned above can be provided after attestation by Foreign Public Notary
Mandatory Post Incorporation Compliances for Company registered with FDI
1.  Initiate to Open Bank Account to receive Subscription Money from shareholders.
2.  Arrange for Receipt of Subscription Money from Foreign Subscriber into Bank account of company within 25 days of the Incorporation.
3.  Collect FIRC Certificate and KYC from the Bank as per FDI Guidelines and Report to RBI in Advance reporting form to RBI with FIRC and KYC.
4.  Issue Share Certificate to the subscribers for the shares subscribed at the time of Incorporation of Company.
5.  After issue of share certificate File FCGPR with RBI as per FDI Guidelines, with FCGPR we have to submit all the details of shares subscribed and paid for along with a certificate from Practicing Company Secretary and a certificate form Chartered Accountant.


Note: Company having FDI must have to comply with Reporting and other requirement of RBI as per FDI Guidelines. Non compliance may lead to heavy penalties and regulatory action from RBI.
 

FAQ's on Registration of Private Limited Company (With FDI)

NRI are allowed to invest in accordance with the policy laid down by the RBI.

Yes, the Indian company can borrow under the Automatic Route (no requirement of RBI approval) for a loan upto USD 500 million. he NRI can give loan on non repatriation basis.

Foreign direct investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. It is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor

The routes under which foreign investment can be made is as under: Automatic Route- Under the Automatic Route- the foreign investor or the Indian company does not require any prior approval from the Reserve Bank or Government of India for the investment. - Government Route- Under the Government Route- the foreign investor or the Indian company should obtain prior approval of the Government of India(Foreign Investment Promotion Board (FIPB).

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