NRIs can set-up these companies in India:
a) Limited Companies: The migrated Indians can set-up a limited company in India. Yet, he has to act as per certain standards due to its greater compliances.
b) Limited Liability Partnership (LLP): Under NRI service in India, the Indian government has invited Foreign Direct Investment (FDI) recently via LLPs but the related conditions are still rigorous.
c) Liaison Office: The functioning of this office is under strict restrictions. So, if you want such business set-up that works as communication link-up between the foreign company and its clients in India, it’s the most suitable one.
d) Branch Office: This is an excellent choice for opening the branch of your business in India. Your office can function like a limited company but can’t do manufacturing.
e) Project Office: It is established for a particular project & acts as temporary branch.
What are the barriers faced by NRIs to set up business in India?
a) An individual NRI can’t setup company alone: The New Company Act 2013 states that one person can set-up a company. But the person should be the resident of India. NRIs, PIOs & natives of foreign countries are not allowed.
b) Must include Indian resident: The Company Act states that an NRI, PIO & citizen of foreign nation are eligible only for director position of an Indian Company.
c) Which company is for NRIs: The migrant Indian has two options, i.e. Public & private companies. But there should have partnership of one resident & one Indian citizen in private company. And public company can be started with 7 partners including one who is Indian resident as well as citizen.
d) Win authenticity of documents from Indian Embassy: The first documentation work in India for commencing a company requires proposed directors’ Digital Signature Certificates (DSCs). Then, they file application for Directors’ Identification Number (DIN). Fort this, NRIs need authenticity of their address proven from Indian embassy. It is for notarization.
e) No address proof for setting-up registered office: For registered office, ectricity bills/property tax receipts/ gas bills & No Objection Certificate (NOC) from the company’s owner at the initial stage are must. The address proof is needed at the end.
Solutions for removing barriers:
a) Companies avail Indian residents: For remuneration, many companies avail Indian residents to fulfill the conditions of the Company Act, 2013.
b) Opt for partnership for setting-up business: A migrant, alone, does not fulfill the conditions of Indian government’s Company Act. The government has introduced it via NRI investment for enhancing their Investment in India.
Virtual office available for registered office address: The migrant Indians can go for virtual registered office in return of remuneration to incubation centres & companies.
