In India, foreign nationals/entities have no restriction to incorporate a company in India. The entry in the Indian market with foreign direct investment is subjected to the provisions of the Foreign Exchange Management Act (FEMA) and permission of the Reserve Bank of India (RBI). It is important to mention that foreign direct investment is not permissible in the business of proprietorship and partnership. Further, the registration and investment of such entities must be succeeded by the formal reporting to RBI.

Key notes about Foreign Direct Investment (FDI) in India

• It is not permissible in proprietorship and partnership business
• In India, there are two routes for FDI:

1. Automatic Route: FDI is permitted up to 100% in most of the sectors other than those sectors which are capped or are restricted.

2. Approval Route: Prior approval from the Foreign Investment Promotion Board (FIPB) of the Government of India is required under this route.

• It takes minimum 15 days for incorporation of a company in India
• Registration in India bounds the company to a formal reporting to RBI within 30 days of capital infusion and also about every step of the company.

• Perpetual Succession
• Foreign Direct Investment in India.
• Acquiring the property in India becomes easier
• Limited liability of directors and shareholders
• Friendly business laws and developing economy make it less risky to enter the market and expand the business.

• The documents required for FDI Company Registration must be latest and eligible.
• There must be at least one resident director of the company who stays for at least 182 days of a financial year in India
• The documents for the registration must be legalized or attested by the Indian embassy present in their country.

STEP 1: Attestation of all the documents signed by the proposed director and shareholder by the Indian Embassy present in their country along with their passport and address proof.

Or

In case the foreign national is already in India under business visa with all the original documents then in that situation it can be attested in India.

STEP 2: Application for setting up offices through Form FNC-1 to RBI along with the attested documents.

STEP 3: Issuance of Digital Signature Certificate of directors and promoters.

STEP 4: Application for reservation of name of the company, DIN (Director Identification Number), incorporation of a company, PAN/TAN through SPICe (Simplified Proforma for Incorporating a Company Electronically) form.

STEP 5: Registrar of Company will issue “Certificate of Incorporation”.

STEP 6: Opening of a bank account as the foreign direct investment must reach within 180 days of incorporation of the company with advance intimation to Banker.