Registering an Indian company as an NRI or foreign founder

India allows 100% foreign ownership under the automatic route in most sectors — no prior government approval, only post-facto reporting. NRIs, OCI holders and foreign nationals incorporate Indian companies every day: wholly-owned subsidiaries of overseas parents, joint ventures, and startups founded from abroad. The process is the same SPICe+ filing as for residents, with three additional layers.

Layer 1: the resident-director requirement

Every Indian company must have at least one director who has stayed in India for 182 days or more in the financial year (Section 149(3), Companies Act). The resident director does not need to hold shares — a trusted professional or local associate can fill the seat. This is the single most common blocker for foreign founders, so settle it before filing.

Layer 2: document legalisation

Documents signed outside India — passports, address proofs, board resolutions of a foreign parent — must be notarised and apostilled (for Hague Convention countries) or consularised (for others). NRIs holding Indian PAN and Aadhaar have a lighter path. Allow an extra one to two weeks for legalisation; it is the main reason cross-border incorporations take longer than domestic ones.

Layer 3: FEMA reporting after the money lands

When share subscription money arrives from abroad, the company must report the allotment to the RBI in Form FC-GPR through the FIRMS portal within 30 days, supported by FIRC and KYC from the receiving bank. Later profit repatriation — dividends, buybacks, royalties — flows through normal banking channels once taxes are settled. These filings are routine when done on time and painful to regularise when missed.

Which sectors need approval?

A short negative list — including multi-brand retail beyond limits, defence beyond caps, and any investment from countries sharing a land border with India (which requires prior government approval regardless of sector) — sits outside the automatic route. E-commerce marketplaces have specific conditions, though 100% FDI is permitted in B2B e-commerce and marketplace models. We advise checking the current FDI policy for your sector before structuring; this is where an hour of advice saves months of unwinding.

Taxes the parent should model upfront

An Indian subsidiary pays corporate tax like any domestic company (22% effective 25.17% under Section 115BAA for most). Dividends to the foreign parent attract withholding, typically reduced by tax treaties (DTAA). Transfer pricing applies to transactions with the parent from day one — keep intercompany agreements and pricing documentation current. Our first-year compliance guide lists the domestic deadlines that apply equally to foreign-owned companies.

Frequently asked questions

Can a foreigner own 100% of an Indian company?

Yes, in most sectors under the automatic FDI route with no prior approval — only post-investment RBI reporting. A short negative list of sectors, and all investment from land-border countries, needs government approval.

Does a foreign founder need to visit India to incorporate?

No. Incorporation is fully online. Documents executed abroad must be notarised and apostilled (or consularised), and at least one director must be India-resident, but the founder need not travel.

Can an NRI be the resident director?

Only if they actually meet the residency test — 182 days or more in India during the financial year. An NRI living abroad typically appoints a local professional or associate as the resident director.

How are profits taken out of India?

Through dividends, buybacks, royalties or service fees — all remittable through banking channels after applicable withholding tax, usually reduced under the relevant tax treaty (DTAA).