Can NRIs form a company in India

Dear Ramesh,

Surely you can form a Company in India, Minimum authorised capital requirement is Rs 1 lac in case you wish to form Private Company and Rs 5 lacs if you wish to form a Public Company

Hello,

As per recent master circular of FDI which is applicable from 1st October issued by Reserve Bank of India ,

‘Non Resident Indian’ (NRI) means an individual resident outside India who is a citizen of India or is a person of Indian origin.

A non-resident entity (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India, subject to the FDI Policy.

NRI is allowed to invest up to 100% in certain sector and there are sectoral gaps in sector .

Hence , there is no restriction under FEMA or Companies Act for an NRI to make an investment in India or to form a company in India.

R.V.Seckar

Pl do visit my blogs :https://rvsekar.blogspot.com/

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FDI_Circular_02of2010.pdf

 Hi

NON-RESIDENT INDIAN AS SUBSCRIBER TO THE MOA/AOA

The Reserve Bank of India had given general permission under section 29(1)(b) of the former FERA, 1973 to NRI to subscribe to the MOA of an Indian company and to take shares as a subscriber .(Notification No. FERA 143/93-RB, dated 26-4-1993 issued by RBI, Mumbai in this regard is reproduced hereunder:

“The RBI has given general permission to NRI to subscribe to the MOA/AOA of Indian Company for the purpose of Incorporation of the company subject to the condition that:-

(a)                the total face value of the shares to be taken by NRI does not exceed Rs. 10,000

(b)               the company is being manly formed  for undertaking industrial activities

(c)                the MOA of such company does not permit the company to take up any agriculture/plantation activities  and to deal in real estate business other than developing real estate, and

(d)               such company shall file a declaration in the prescribed form with the RBI regarding particular of such shares issued within 900days from the date of incorporation of the company.

DCA Circular dated 16-2-1995 clarifies that there can not  be any restriction for incorporation of a company whether all the subscriber to the MOA/AOA/  proposed directors are residing abroad, being either foreign nationals, or NRI subject to the approval of RBI, where necessary.

The RBI may issue such a general permission also under FEMA, 1999 also. The FEMA(Permissible Capital Account Transactions) Regulations, 2000 allow persons resident outside India to invest in an issue of security by body corporate or an entity in India.

Views of other experts solicited,

Best Regard