Appointment of NRI as Managing Director

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The appointment of a Non-Resident Indian (NRI) as a Managing Director in an Indian company is permissible under Indian company law, which generally allows foreign nationals to hold directorships. However, specific provisions, particularly within Schedule V, stipulate that a person must be a resident of India for at least 12 months prior to appointment to be eligible for the role of Managing Director or Whole-Time Director. The necessity of filing MR-2 in such appointments also requires clarification based on specific circumstances.

MANISHA MAKHIJA

MANISHA MAKHIJA (Querist)
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16 March 2023 Please provide whether NRI be appointed as Managing Director of the Company without Central Government approval.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 March 2023 Yes, The company law in India does not bar foreign nationals from becoming directors in Indian companies. A foreigner or a non-resident Indian can become an executive or a non-executive/independent director of Indian companies whether public or private.

MANISHA MAKHIJA

MANISHA MAKHIJA (Querist)
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16 March 2023 Thank You Sir
But filing of MR-2 is mandatory?
Company has appointed Managing Director without filing MR-2

Jatin Bajaj

Jatin Bajaj (Expert)
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20 March 2023 In General Paralance, there is no bar in appointment of non resident person as the Director but pursuant to the provisions mentioned in schedule v , it is stipulated that no person shall be eligible to be appointed as the managing director or the whole time director unless he is resident of India.
For Purpose of schedule 5- person resident in india means a person who has been residing in india for a continuous period of 12 (twelve) months immediately preceding the date of his appointment.

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