Indian Private Limited Company for Foreigners

A Private Limited Company is one of the easiest forms to establish in India. Similarly, when a foreign national or a foreign company wants to become a part of such a company, the process still remains easy. Furthermore, foreign direct investment in such entities is compliance-free and does not incur huge amounts. Therefore, foreign nationals find it easy and convenient to invest in such entities.

Scope of Investment in India

As India is one of the fastest-growing economies globally, it tends to attract huge amounts of investment from all over the world. As indicated by a new report by Nomura, a Japanese Brokerage firm, Foreign Direct Investment into India will probably have hit a high of $34.9 billion in the financial year 2015, a monstrous 61.6 percent hop from $21.6 billion in the past financial year. With the world's second-biggest populace and an enormous ability pool of talented IT experts, India keeps on being an attractive investment opportunity among foreign companies and foreign nationals. In this article, we give a thorough manual for Indian Private Limited Company and how it works for foreign nationals. 

Incorporation of Private Limited Companies in India 

Registration or incorporation of a private limited company is the simplest and quickest sort of India section procedure for foreign nationals and also foreign companies. Foreign Direct Investment of up to 100% into a private limited company is under the automatic route, wherein no Central Government consent is required. Therefore, incorporation of a private limited company, though in the form of a wholly-owned subsidiary of a foreign company or joint venture is one of the cheapest, easiest, fastest entry techniques for foreign nationals or foreign companies. 

Foreign Direct Investment in restricted areas 

Foreign Direct Investment (FDI) to an Indian Private Limited Company or Limited Company is permitted up to 100% in almost all sectors. There are very few sectors that require prior Central Government approval for investment by a foreign company or foreign national. The below mentioned are some of the sectors that require Government Approval for investment by a Foreign Company or Foreign National:

  1. Investment in Atomic Minerals
  2. Any kind of investment made in Print Media 
  3. Investment into the broadcasting sector
  4. Investment in the Petroleum sector (except for private sector oil refining), Natural gas / LNG pipelines.
  5. Investment into the postal services 
  6. Investing in companies that deal with infrastructure 
  7. Investment in the defence and strategic industries 
  8. Any kind of investment in courier services
  9. Any amount of investment in the Tea Sector
  10. Investment in asset reconstruction companies 
  11. Investment in the development of the integrated township
  12. Investment into the establishment and operation of satellites 

Checklist for a Private Company Registration with Foreign Directors 

When a company is registered with one or more of its directors being foreign nationals, the following things need to be checked:

  1. Documentation and its requirements 

The details of the proposed directors along with self-attested documents and passports are required in case of foreign directors duly notarized and apostille in the home country. However, in case of non-availability of notary and apostille in the Home Country, it is then important to get it duly notarized in India. 

The attestation here could also be done by a Public Notary / Gazetted Officer in India or a Practising Company Secretary / Practicing Chartered Accountant if a foreign director has a valid multiple-entry Indian visa or he is a POI (Person of Indian Origin) card or OCI (Overseas Citizen of India card)

  1. Director Identification Number 

If DIN is already available: When a foreign national has a Director Identification Number (DIN), it needs to be cross-checked whether the DIN was obtained according to the prescribed company laws or not. With this, details of the directorship in other companies need to be checked as well. 

If DIN is not available: In such circumstances where the foreign national does not carry a Director Identification Number (DIN), he/she may get it through India, according to the prescribed laws under the Companies Act, 2013. 

  1. Shareholding Pattern 

Shareholding Pattern: In circumstances where the director also holds shares in the company, its details and specifications are required to be given. 

Subscribing to the Memorandum of Association (MOA) & Articles of Association (AOA)

By subscribing to the MOA & AOA, the shareholders (they might be either the foreign companies or foreign nationals or Indian companies or Indian nationals) show their interest in becoming a shareholder in the company to be registered or incorporated. 

In a situation when a foreign national is signing the MOA & AOA Subscriber form in India:

In such casethe signature of the foreign Director shall be verified by the public notary of that respective country or it can also be verified by the Officers of the Embassy. Furthermore, a copy of a valid business visa for India shall also be attached. 

In a situation when a Foreign National is signing the MOA & AOA Subscriber Sheet while residing outside of India:

If the country is a Commonwealth Nation:

In such a case, the signature of the Director, the director’s identity proof, and the address proof must be notarized by a Notary in that part of the Commonwealth.

If the residing country is a party to the Hague Apostille Convention:

In such a case, the signature of the Director, the director’s identity proof, and also the address proof must be notarized by a Notary of the country of his origin and duly apostilled in accordance with the Hague Convention.

If the residing country is neither a Commonwealth Nation nor a Party to the Hague Convention:

In such a case, the signature of the Director, the director’s identity proof, and address proof must be notarized by a Notary of the country, and the certificate of the Notary must be validated and authenticated by a Diplomatic or Consular Officer.

Furthermore, there might be cases, where the Foreign Company is a subscriber to the MOA & AOA of the proposed Indian Company:

Below mentioned are some of the documents pertaining to the foreign entity subscribing to the shares of the Indian Company that shall be submitted:

  1. Board resolution of the Foreign Entity authorising investment in shares of the Indian Company.
  2. A copy of the certificate of incorporation of the foreign entity.
  3. A copy of the address proof for the foreign company.

Once the above documents are submitted along with the application for incorporation of a company, the Registrar will then issue a Certificate of Incorporation for the Indian Private Limited Company, only if the documents submitted are valid and acceptable. 

Once the incorporation certificate is obtained, the Indian Private Limited Company will then apply for a PAN Card and will also take the necessary steps for opening a bank account for the respective company in India.


Foreign Direct Investment in a private limited company is one of the safest and easiest options for economic growth as a whole. Furthermore, the easy process established by the government and the Ministry of Corporate Affairs attracts foreign nationals to be a part of the company, thus leading to an increase in the overall growth of the country. 

Related Articles

Search Companies