One of the economies in the world with the quickest growth rates in India. Establishing a business in India is a desirable alternative because the government supports international investment, and the country has an abundance of skilled workers at reasonable prices. Even non-resident Indians (NRIs) are considering the possibility, particularly in light of the most recent budget. But before starting a business in India, NRIs need to bear some consideration.
In India, establishing a business has never been simpler. Since economic liberalization began in 1991, foreign direct investment (FDI) has gradually increased. During the most recent fiscal year, 2018–19, India received $64.37 billion in FDI, which was a record high. This is a result of loose FDI regulations in numerous economic sectors. India now holds the top spot for the South Asian area and ranks 63rd out of 190 economies in the World Bank’s most recent Ease of Doing Business survey (EoDB).
Directors and shareholders
Additionally, it calls for a minimum of two directors. A director may also be a shareholder. A director does not have to be a shareholder, though. The resident director must carry out several duties. They may or may not be involved in managing the company but must communicate with the local governmental agencies as needed. A private limited business is required to have two directors at a minimum. A resident and citizen of India should make up at least one of the directors. Additionally, a company’s profit repatriation is liable to tax in India at a rate of 20%, which may be reduced by the tax treaty rate, which the NRI tax experts very well guide. On the other hand, distribution from an LLP is tax-free.
Directors are given a Director Identification Number (DIN), a unique number. You must follow some procedures to appoint a director, which applies to resident directors and NRIs. Specific papers, such as? Must be authenticated to receive a DIN. The documents require attestation from the Indian embassy in the nation where the NRI resides.
Additionally necessary is a digital signature. Permanent Account Number (PAN) and Tax Deduction and Collection Account Number are also requirements for businesses (TAN). These are utilized for taxation. “The Indian Businesses Act, 2013, allows NRIs to act as directors of Indian companies, but they must first apply for a digital signature certificate and then get a DIN.
In India, you must have documentation of your residence before opening a business. NRIs are international residents; therefore, they lack documents proving their addresses. So, for them, obtaining address proof is difficult. NRIs may decide to use virtual offices as a solution to this issue. Many incubator facilities offer this service.
If an NRI invests in India on a repatriation basis, it is regarded as an FDI. Consequently, FDI regulations must be observed. Both the automated route and the government route are available for FDI investments. The automatic route requires no authorization from the Reserve Bank of India (RBI) or the Indian government. However, the government route needs approval in advance.
Make use of the exclusive NRI bank accounts, such as the Non-Resident Account, if you are an NRI intending to launch a business in India (NRE). It enables you to deposit international earnings into your bank account via various online money transfer providers or repatriate your funds whenever you’d like. It is always advisable to take due advice from the NRI tax consultant Pune.