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A company is an artificial person registered under the Companies Act, 2013 or any other previous company law which is managed and controlled by the Directors /officers of the company. A director can be resident director as well as foreign director. In company number of persons contribute the amount in terms of share capital and invest the capital for some specific purpose. It is formed by a single or a group of persons to achieve the objective of the company and perform all the activities efficiently and effectively.
In this article, we will discuss about the company registration with foreign directors;
Table of Contents
A Director is a person acting on behalf of the company, as the company is a legal entity but does not have a physical existence. There is no exhaustive list defining the duties of the directors. If the director have interest in the transaction, a proper disclosure is required to be given by the interested director. Directors are the brain of the company and take all the decision regarding the management of the Company.
Directors act as an agent as well as the trustee of the company. They act as the supreme authority of the company who controls and manages the affairs of the company.
A number of powers are there for the directors of the company and has to meet out the following duties –
A foreigner or NRI can be executive and Non-executive director whether Public or Private Company. Foreign Directors have the same duties as Indian Director.
Foreign national can be appointed as the director as any of the below-mentioned designation –
Following criteria required to be fulfilled by a person to become a Director (Including Foreign Nationals) –
A foreign national, shall make an application for obtaining DIN in electronic Form DIR-3 along with the fees of Rs 500 as prescribed by the Government. An electronic system of the Central Government is there to facilitate the submission of the application for allotment of DIN through MCA Portal.
Documents in case of foreign national director should be certified by the Indian embassy/Notary in the home country.
If a foreign person possesses
the qualification, skills, knowledge, experience in 1 or more fields of Law,
Finance, sales, marketing, administration, research and technical field which
related to Company’s business can be appointed as Independent Director.
A foreign national intends to
become the managing director or full-time director must fulfill the criteria of
the resident of India and he shall select the nationality as declared in the
A foreign national has no restriction to become a director in an Indian Company. He can hold and maintain a foreign currency account with the bank outside India and valid employment visa. He is eligible for remuneration, sitting fees, commission like Indian Directors. Proper Disclosure and Declaration is required to be given by the director.
When a Foreign national earns in India as director of the Indian Company, he is subject to Income under Income-Tax Act. TDS is deducted from their remuneration/Commission. As per Income-tax Act, if a non-resident who is a director in an Indian company having a financial transaction of Rs 2,50,000 or more in a financial year is required to obtain a PAN Card compulsorily.
Registration of a company with foreign directors requires following information and documentation mentioned below –
Registration of the company with foreign directors is not restricted, however, a person has to comply with the stipulated conditions. Foreign National can be both an executive and non-executive director. The procedure for appointment of the foreign director is as same as the Indian director with additional documentation and compliance like notary and Apostle of documents are necessary to validate the documents by Embassy.
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