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Appointment of Non-Resident/ Foreign Citizen/ Foreign National as a Director

September 30, 2015     by Kamini Goyal

Can a Non-Resident/ Foreign National/ Foreign Citizen become Director of an Indian Company?

 Yes,  a foreign nationals or foreign citizen or Non-Resident Indians residing abroad can be appointed as a Director on the Board of Indian companies whether public listed or unlisted or private. He may be appointed as Whole Time Director (Executive director) or Non – Whole Time Director (Non – Executive Director).

Pre-requisites to become a Director for NR 

1. Digital Signature Certificate (DSC) and Director Identification Number (DIN)

To become a Director, an individual is required to obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN).

2. Passport

For applying DIN and DSC,   Passport Number is mandatory for Non-residents. Foreign nationals shall select the nationality as declared in the passport. The above documents are required to be certified by the Indian Embassy or apostil led by notary in the home country of the applicant.

Note:

Permanent Account Number (PAN) from the Indian Income Tax department is not compulsory required from Non-Residents.

Resident Director under Companies Act 2013: –

Section 149(3) of Companies Act 2013 provides that every Company shall have at least one Director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

Even a Non- Resident can act as Resident Director of the Company provided he has stayed in India for more than 182 days in the previous calendar year.

Attending Board Meeting by Non-Residents: –

Companies Act 2013 does not prohibit holding of Board meetings abroad.

Also, according to Section 173(2), there is a provision for conducting Board meetings through video –conference, thereby making it simple for Non-Residents.

For more info on BM through Video Conference, please click https://bsamrishindia.com/board-meeting-through-video-conferencing-or-other-audio-visual-means/


 

25 thoughts on “Appointment of Non-Resident/ Foreign Citizen/ Foreign National as a Director

  1. Hi, we want appoint a foreign resident as Executive director of private limited company , we will be paying commission based on the sales we make, so i wanted to know will there be any tax on what we pay to her. ( we are not issuing any shares to foreign director.)

    1. Since the commission will be generated from an Indian Company, it will be taxable as per the Income Tax Act (As per Residential Status Rule)and the Company will be required to deduct TDS at the time of making payment. Also, as per sec 139A of Income Tax Act, every person, whether resident or non-resident in India, who is a director in an Indian Company that has financial transaction of Rs. 250,000/- or more in a financial year will have to compulsory obtain Indian PAN card.

  2. i am floating a PLC with NR as a director in the company. in such a case while filing DIR-2, do i need to mention the details regarding the holding of directorship by NR in company not registered in India?

  3. Section 196 of the Companies Act, 2013, Can you elaborate, if the NRI can become MD of a public company, but shares are not traded publically

    1. As per point (e) of Part 1 of Schedule V to Companies Act 2013 , a MD or WTD or Manager of company shall be a resident of India. If you wish to appoint an NRI as an MD, you need to make an application to Central Government.

  4. Please tell me how much share in private limited company a foreigner can hold. In my company I have two indian director and we want to add one foreigner director.

  5. Dear sir, Namaskar! I am a Russian citizen, having O.C.I. card, residing in India for 5 years 6 month continuously. I have PAN card, Aadhar card, Bank Statement. My husband (Indian citizen) and I want to incorporate PVT. LTD. Company. But i am confused at one place whether I should file MoA and AoA physically signed and attached in attachment column of INC-32 or should submit through linked form INC-33,34. Thank You in advance with regard.

    1. If the number of subscribers to MOA are less than 7, the documents are to be filed through linked forms i.e. e-MOA and e-AOA. However, if the number of subscribers to MOA are more than 7, then the documents have to be submitted in physical form.

  6. can a nri director pay for preliminary expenses from his account and later get reimbursed by the company?

  7. The MD of the company is Indian Citizen and Resident Indian at the time of his appointment. Can he subsequent to his appointment as MD relocate to the overseas office of the Indian company, thereby becoming non-resident and still continue as the MD of Indian company?

    1. As per provisions of Section 196 of the Companies Act, 2013, In case of private companies vide Notification dated 5th june, 2015 there is no such restriction that MD should be resident in India. Thus, even a non-resident can become MD.

      1. As per provisions of Section 196 of the Companies Act, 2013,in case of a private company Notification dated 5th june, 2015. there is no such restriction that MD should be resident in India. Thus, even a non-resident can become MD.

  8. Sir, can the foreign director be made a party to suit in a case filed against the company in india? are there special provisions for that?

  9. Sir you mentioned that PAN is not required for NRIs but while filing DIR-3 even after selecting Non Resident it shows PAN is Mandatory.

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