🧭 1. Understand Eligibility & Investment Routes
NRIs/OCIs can invest or set up business in India through:
✔ Automatic Route
No prior approval from RBI required for most sectors including:
- IT & Tech
- Manufacturing
- E-commerce marketplace
- Trading
- Services
✔ Approval Route
Government approval needed for sectors like:
- Defense
- Media
- Satellite
- Telecom (partial)
Check sector-specific FDI limits before planning.
🏢 2. Choose the Suitable Business Entity
Common structures for NRI entrepreneurs:
✔ Private Limited Company
- Most preferred
- Limited liability
- Easy fundraising
- 1 Resident Director mandatory
✔ LLP (Limited Liability Partnership)
- Flexible structure
- Limited compliance
- Allowed for service sectors
✔ Subsidiary of Foreign Company
- Ideal for expansions
- 100% FDI in many sectors
- Treated as Indian company for taxation
✔ Branch Office / Liaison Office
- Requires RBI approval
- Limited activities permitted
📜 3. Obtain Digital Signature (DSC) & DIN
For company/LLP incorporation:
- Directors require DSC for digital filings
- Directors require DIN (Director Identification Number)
Documents needed:
- Passport
- Overseas address proof
- Photo
- Email & phone
🧾 4. Register Entity with MCA (Ministry of Corporate Affairs)
Steps:
- Reserve company name (SPICe+ Part A)
- Draft MOA & AOA
- Submit incorporation forms (SPICe+ Part B)
- Apply for PAN & TAN
- Obtain Certificate of Incorporation
Processing time: 7–15 working days
💰 5. Plan Capital Investment & FDI Compliance
Under FEMA, foreign funds coming from NRI/OCI qualify as FDI.
Requirements:
- Funds must come from NRE/FCNR(B) or foreign bank account
- Valuation certificate (if required)
- Filing of FC-GPR form after share allotment
- Reporting to AD Bank + RBI
Investment instruments include:
- Equity shares
- Compulsorily Convertible Debentures (CCDs)
- Compulsorily Convertible Preference Shares (CCPS)
🏦 6. Open Bank Accounts
After incorporation, the company must open:
- Current Account for operations
For capital infusion:
- FDI remittance must come through NRE/FCNR(B)/Foreign bank account
- Bank issues FIRC & KYC report (mandatory for FC-GPR filing)
📑 7. Apply for Mandatory Registrations
Depending on business nature:
✔ GST Registration (if turnover > threshold or inter-state)
✔ Professional Tax (in applicable states)
✔ EPF/ESIC (when employees exceed limits)
✔ Import Export Code (IEC) for export/import
✔ Startup India Recognition (optional)
These enable legal operations and tax compliance.
💼 8. Setup Accounting, Tax & Audit Structure
NRIs must plan:
- TDS compliance
- GST filings
- Transfer pricing (if foreign group involved)
- Statutory audit
- ROC filings
Corporate taxes apply as per Indian rules:
- Domestic company tax rate: 22%–25% approx.
- MAT may apply for certain entities
🚀 9. Operational Setup & Team Hiring
NRIs must consider:
- HR compliance
- Payroll setup
- Vendor contracts
- Tech infrastructure
- Data compliance (especially IT startups)
Certain roles like director/employee may require appropriate visas for foreign nationals.
🌍 10. Repatriation & Exit Planning
NRIs may repatriate profits subject to:
- Taxes paid in India
- Board declaration
- Compliance reporting
For repatriation:
- File Form 15CA/15CB
- FEMA reporting
- Bank documentation
Shares can also be transferred through:
- FEMA-compliant valuation
- Form FC-TRS reporting
Common Challenges Faced by NRIs
❌ Lack of resident director
❌ Misunderstanding FDI rules
❌ FEMA reporting delays (FC-GPR)
❌ Bank KYC issues
❌ Repatriation misunderstandings
❌ Tax treaty interpretation errors
Professional assistance helps avoid compliance penalties.
Conclusion
Setting up a venture in India as an NRI is a structured process involving:
- Entity selection
- FEMA & FDI compliance
- MCA incorporation
- Banking & capital infusion
- Tax & regulatory filings
With proper planning, India offers vast growth opportunities and ease of doing business for global entrepreneurs.
Disclaimer
This blog is for informational purposes only and does not constitute legal, tax, or investment advice. Regulatory rules, FEMA provisions, FDI caps, tax laws, and incorporation policies may change over time. Always consult qualified professionals and verify latest rules before executing any business setup in India.