How Can an NRI Set Up a Business in India?

Are you an NRI dreaming of starting your own business in India? Now is the perfect time to make that dream a reality! India’s economy is soaring, making it a prime destination for NRIs and foreign nationals. India is growing at a robust 6.5% in the 2025-26 fiscal year, keeping its position among the world’s fastest-growing major economies.

The Indian government has made the process of Foreign company registration in India more streamlined than ever, with policies like the “Automatic Route” for foreign direct investment. This means you can own up to 100% of your company in most sectors without needing prior government approval. This liberal approach makes it easy for a foreigner to register a company and tap into one of the world’s largest consumer markets. 

With this blog, we’ll break down the entire process into simple, manageable steps, so you can confidently launch your business and become a part of India’s exciting growth story.

Can NRIs Start a Business in India?

The process for starting a business in India by an NRI or foreign national has been simplified by liberal government policies.

• Foreign Direct Investment (FDI) Policy: India allows up to 100% FDI under the Automatic Route in most sectors, letting foreign investors invest without prior government approval. However, some sectors still require government approval or have restrictions, including defense, atomic energy, and certain agricultural products. These rules mean foreigners need prior clearance to invest in these areas.
• Permissible Business Structures: Foreign nationals can incorporate different business structures in India, including a Private Limited Company (most common), a Public Limited Company, or a Limited Liability Partnership (LLP).  The government or the Reserve Bank of India (RBI) may require prior approval when foreign contributions come from outside India or involve certain sectors.
• No Minimum Capital Requirement: Under the Companies Act, 2013, India has removed the requirement for a minimum paid-up capital to register a Private Limited Company. Previously, the Companies Act, 1956, mandated a minimum paid-up capital of Rs. 1 lakh for private companies and Rs. 5 lakh for public companies. The Companies (Amendment) Act, 2015, implements this change, simplifying business registration and improving ease of doing business in India.
• Resident Director Requirement: While foreigners can be directors, every company in India must have at least one director who is a resident of India. You have to stay in the country for at least 182 days in the preceding financial year.
• Digital Process: The entire NRI company registration in India process, from getting a Digital Signature Certificate (DSC) to filing incorporation forms, is done online, so a physical presence is not required.
• FEMA and RBI Regulations: The Foreign Exchange Management Act (FEMA) and the Reserve Bank of India (RBI) govern foreign investments, ensuring transparency and compliance. Companies must route investments through proper banking channels and report them to the RBI.

Best Business Structures for NRIs & Foreign Nationals in India

Choosing the right legal structure is crucial. Here are the most popular options for setting up business in India by foreign companies:

Business Structure	Ownership Rules	Liability	Compliance Level	Best Suited For
Private Limited Company	100% NRI/Foreign ownership allowed (except in restricted sectors)	Limited to shareholding	High (annual ROC filings, audit, board meetings)	Startups, scalable businesses, tech & services
Limited Liability Partnership (LLP)	NRI/Foreign nationals can be partners; at least 1 Indian resident designated partner required	Limited to the contribution	Moderate (ROC filings, audit only above threshold)	Professional services, SMEs, flexible ventures
Wholly-Owned Subsidiary Company	100% foreign ownership permitted under the automatic FDI route (except restricted sectors)	Limited to shareholding	High (similar to Pvt Ltd)	MNCs expanding into India independently
Joint Venture (JV) with Indian Partner	Shared ownership with Indian partner (equity split based on agreement)	Limited	Medium-High	Businesses needing local expertise, partnerships in restricted FDI sectors
Branch Office / Liaison Office / Project Office	Requires RBI approval; ownership remains with the parent foreign company	The parent company is fully liable	High (RBI + ROC reporting)	Foreign companies testing the Indian market without full incorporation
Sole Proprietorship	Rarely permitted for NRIs; strict restrictions apply	Unlimited (personal assets at risk)	Low	Very small businesses, not recommended for NRIs

How Can an NRI or Foreign National Register a Company in India?

Registering a company in India is now a streamlined, digital process. Following these steps will help with company registration in India by NRIs.

Step 1: Obtain a DSC and DIN

Directors need to sign a Digital Signature Certificate (DSC) digitally. After getting a DSC, you must apply for a Director Identification Number (DIN). 

The Ministry of Corporate Affairs (MCA) assigns a unique 8-digit Director Identification Number (DIN) to any individual who wants to become a company director

• You can apply for the DSC through a government-approved Certifying Authority.
• You can apply DIN directly through the SPICe+ form during incorporation.

Step 2: Reserve a Unique Company Name

You must choose a name that is unique and not too similar to any existing company or trademark. This is a critical step for NRIs setting up a business in India.

• You can check for name availability on the MCA website.
• You apply for name approval by filing the Reserve Unique Name (RUN) form or through the SPICe+ form.

Step 3: Draft the MoA and AoA

The Memorandum of Association (MoA) and Articles of Association (AoA) are the most important documents that define your company’s purpose and internal rules.

• The MoA states the company’s objectives and capital structure.
• The AoA outlines the company’s internal management, rules, and regulations.

Step 4: File the SPICe+ Form for Incorporation

This integrated form allows you to apply for multiple services at once, making the process of company registration in India by NRI much faster.

• The SPICe+ form includes applications for company incorporation, DIN allotment, and even the company’s PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number).
• Attach the MoA, AoA, and all required documents.

Step 5: Receive the Certificate of Incorporation

This is the final step where the government officially recognizes your company.

• After the Registrar of Companies (RoC) verifies all the submitted forms and documents, it will issue the Certificate of Incorporation.
• This certificate is the legal proof of your company’s existence and includes your Corporate Identification Number (CIN).

Documents Required for NRI/Foreign Business Registration

To avoid delays, you need to have all your documents ready. Here is a simple checklist for a foreigner to register a business in India:

• For Directors/Shareholders:
  • Passport: This is mandatory for all foreign nationals and NRIs.
  • Proof of Address: A bank statement or utility bill that is not older than two months. This document has to be apostilled or notarized in your country of residence.
  • Passport-Sized Photograph: A recent photo of each director and shareholder.
• For the Company’s Registered Office:
  • Proof of Address: A utility bill (like electricity or water) that is not older than two months.
  • No Objection Certificate (NOC): A letter from the property owner permitting to use of the address as the company’s registered office.
  • Rental Agreement: For rented offices.

Cost of Registering a Company in India 

The total cost is a mix of government fees and professional charges. While costs can vary, here’s an estimated breakdown for a private limited company:

Company Type	Cost Components	Estimated Total Cost (Rs. )
Private Limited Company (Pvt Ltd)	Government fees, stamp duty, DSC, DIN, professional fees	Rs. 7,000 – Rs. 25,000
Limited Liability Partnership (LLP)	Govt fees, DPIN, DSC, agreement filing, professional fees	Rs. 6,000 – Rs. 18,000

Regulations From RBI & FEMA

Foreign investments in India are primarily governed by the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA). This aims to create a transparent and compliant framework.

• Automatic Route vs. Government Route: Most sectors in India allow up to 100% Foreign Direct Investment (FDI) under the “Automatic Route,” which means you don’t need prior government or RBI approval. However, specific sensitive sectors (like defense, media, and telecommunications) fall under the “Government Route,” requiring explicit approval.

Aspect	Automatic Route	Government Route
Approval Requirement	No prior approval needed; investment can be made directly.	Requires prior approval from the Government of India through DPIIT/FIPB (now DPIIT & respective ministry).
Sectors Covered	Most sectors, including IT, manufacturing, services, e-commerce marketplace, etc.	Sensitive/restricted sectors like defense, telecom, print media, multi-brand retail, and others.
Ease of Entry	Quick and hassle-free process.	Time-consuming due to the approval process.
Process	File reports to RBI (like FC-GPR) after investment.	Apply via Foreign Investment Facilitation Portal (FIFP) → Review by DPIIT/concerned ministry → Approval.
Examples	100% FDI allowed in sectors like IT services, single-brand retail, and renewable energy.	FDI in defense (beyond 74%), telecom (beyond 49%), or multi-brand retail.

• Repatriation of Capital and Profits: Foreign investors can freely repatriate their invested capital, dividends, interest, and profits from their business in India. This is allowed subject to the payment of applicable taxes.
• Proper Banking Channels: All foreign funds brought into India for investment purposes must be channeled through a recognized banking institution. This is a strict requirement under FEMA to ensure a clear trail of all financial transactions.
• Reporting Requirements: Your Indian company must file specific forms with the RBI within the stipulated timeframe after receiving foreign investment. For example, a Foreign Currency Gross Inflows (FCGPR) form must be filed within 30 days of receiving the funds.
• No Minimum Capital: While there is no minimum capital requirement for incorporation, the invested funds must be proportionate to the business activities and properly documented as per FEMA guidelines.
• Compliance with FEMA: All business operations involving foreign currency and transactions must adhere strictly to the rules set out in the Foreign Exchange Management Act (FEMA), including maintaining a resident Indian director on the board.

Taxation & Compliance Considerations

You need to understand the tax structure and the annual compliance requirements to operate smoothly after registration.

• Corporate Tax Rates: India has a dual corporate tax regime. Companies can either opt for the traditional tax structure with various deductions and a higher rate (up to 30%) or a new, simplified regime with a lower rate of 22% (plus a 4% cess, making it roughly 25.17%) but without deductions. New manufacturing companies can even get a tax rate as low as 15%.
• Double Taxation Avoidance Agreements (DTAA): India has DTAA with over 90 countries, which are crucial for NRIs. These agreements ensure that you do not pay tax on the same income in both India and your country of residence, either through tax credits or exemptions.
• Tax Residency Certificate (TRC): To claim the benefits of a DTAA, you must obtain a TRC from the tax authorities of your country of residence. This document officially proves your tax residency status.
• Annual Financial Filings: Every company in India must file its financial statements (Form AOC-4) and annual return (Form MGT-7) with the Registrar of Companies (RoC) every year. LLPs file Form 8 and Form 11. These filings are mandatory, even for companies with no business activity.
• Income Tax Return: You must file an income tax return for the company by the specified due date (e.g., July 31st for companies not requiring an audit). Penalties for late filing can be severe, including a fine of up to Rs. 10,000.
• Director KYC: All directors holding a Director Identification Number (DIN) must file their Know Your Customer (KYC) details annually through Form DIR-3 KYC by September 30th to keep their DIN active.

Timeframe for Registering a Company in India 

The entire process of how to set up a business in India by an NRI is now quite quick, thanks to digital platforms. The total time can be broken down as follows:

• DSC & DIN Application: 1-2 days.
• Name Approval: 2-3 days (if the name is approved on the first try).
• Incorporation Filing (SPICe+): 3-7 days.

In total, the process typically takes 7-15 working days. Incorrect documents or a rejected name application can cause delays.

Challenges NRIs Face While Setting Up a Business in India

Starting a business in a new country, even your home country, can present unique hurdles for NRIs and foreign nationals.

• Documentation: Getting your foreign documents, like passport copies and address proofs, properly apostilled or notarized in your country of residence can be a significant challenge and a common cause for delays.
• Banking: NRIs often face issues with banks requiring physical presence to open a company bank account, which is essential for business operations.
• Lack of Local Market Knowledge: An idea that works well in one country may not succeed in India due to different consumer behaviors, cultural nuances, and fierce local competition.
• Compliance and Tax Complexity: Navigating India’s evolving tax laws, including GST and corporate tax, and staying up-to-date with the myriad of annual filings can be confusing and lead to penalties.
• Logistics and Infrastructure: While improving, India’s infrastructure in some regions can pose challenges related to supply chain, transportation, and power reliability.

To avoid mistakes and save time, it’s always wise to consult an expert who can guide you through documentation, compliance, and local business practices.

Solutions for NRIs to Overcome Business Setup Challenges in India

You can easily manage these common issues with the right strategy and support.

• Professional Assistance: Engage with a professional service provider specializing in NRI company registration in India. They can guide you through the entire process, handle documentation, and ensure all filings are accurate and on time.
• Remote Solutions: Many professional firms offer remote assistance for document legalization and banking, allowing you to complete the process without being physically present in India.
• Conduct Market Research: Before you launch, invest in comprehensive market research. Partner with a local consultant or form a team that has a deep understanding of the Indian market.
• Expert Guidance on Tax: Hire a local tax advisor or a Chartered Accountant (CA) who can help you navigate India’s tax laws, ensure compliance, and leverage benefits from Double Taxation Avoidance Agreements (DTAAs).
• Strategic Location: Carefully choose your business location, favoring areas with developed infrastructure or Special Economic Zones (SEZs) that offer better facilities and a supportive environment.

Final Thoughts

Starting a business in India as an NRI or foreign national is now simpler and more rewarding than ever. With liberal FDI policies, pro-business reforms, and a fully digital registration process, turning your idea into a legal entity is faster and more transparent. By understanding the key requirements and choosing the right business structure, you set a strong foundation for your venture. 

With the digital registration process, you can then transform your business idea into a legal entity with limited liability and strong growth potential. However, incorporation is just the beginning. Ongoing compliance, taxation, and documentation still need careful attention. With the right guidance, success in India’s thriving market is well within reach.

Frequently Asked Questions (FAQs)

How many minimum number of directors a private limited company require?

You need a minimum of two directors to start a private limited company. One of these directors must be a resident of India.

Is there a minimum capital requirement?

No, there is no minimum paid-up capital requirement to register a private limited company in India. You can start with any amount you and your partners decide on.

Can an NRI be the sole director of a company in India?

No, at least one director must be a resident of India. This is a key requirement for any foreigner registering a company in India.

Are all documents required for NRI company registration in India accepted digitally?

Yes, the entire process is online. However, some documents submitted by NRIs or foreigners must be apostilled or notarized in their home country before they are uploaded.

What is the difference between a Private Limited Company and an LLP?

A Private Limited Company has shareholders and is a separate legal entity, while an LLP has partners. An LLP has simpler compliance rules, but it is not as easy to raise funds.

What is the Automatic Route for FDI?

The Automatic Route is a government policy that allows foreign investors to invest in most sectors in India without needing prior government approval. This makes setting up a business in India by foreign companies much easier.

Do I need to be in India for the registration process?

No, the entire process is digital. You do not need to be physically present in India to get your company registered.

What is an apostille?

An apostille is a legal certification that makes a document valid in a foreign country. Documents from your home country, such as your passport or address proof, may need to be apostilled.

What is a DIN?

A Director Identification Number (DIN) is a unique 8-digit number that the Ministry of Corporate Affairs (MCA) gives to any person who wants to be a director of a company.

Is it mandatory to have an office in India?

Yes, your company must have a registered office address in India. This can be a commercial or residential property.

Can a foreign company have a 100% subsidiary in India?

Yes, a foreign company can have a 100% owned subsidiary in India. The process and requirements are the same as for any other private limited company.