Can a Foreign Citizen be a Director of the Indian Company?

Can a Foreign Citizen be a Director of the Indian Company?Directors of companies have official duties and legal responsibilities relating to company administration. He leads, manages, or supervises an organization, program, or project appointed. Directors act on the basis of resolutions made at director’s meetings, and derive their powers from the corporate legislation and from the company’s articles of association.

To be a Director of the Indian Company there are no statutory limitations as to nationality or residence, etc. Thus a foreign citizen can also be a director of the Indian Company. It would be likely to include these in a company’s articles, but this is very unusual. Infact, an Indian Company can have all the directors as foreign nationals. RBI has clarified that under the Foreign Exchange Management Act, 1999, appointment of a foreign national as a director on the board of directors of an Indian company does not require the Reserve Bank’s approval.

Foreign nationals intending to enter India are required to be in possession of a valid passport issued in their country along with a valid Indian Visa. Foreign passengers must ensure that they are in possession of an India Visa before embarking their journey, as there is no clause for ‘Visa on Arrival’ in India. Note that nationals of Bhutan and Nepal are not required to apply for an India Visa. Also, nationals of Maldives can stay in India for up to 90 days without an India Visa.

Hence, Employment Visa is required to be granted to foreign nationals employed in an Indian company. An employment visa is valid for up to a year, which may be extended up to 5 years. To obtain an extension, a foreign national is required to obtain permission from the Foreigner Regional Registration Office of the concerned state in India.

Both the Indian promoters and the foreign promoters can form the following business entities: Private Limited Company, Public Limited Company, Limited Liability Partnership, Unlimited Company, Partnership and Sole Proprietorship.

Few conditions are required to be fulfilled to become the director of the Indian Company. The directors of an Indian company, both Indian and foreigner directors, are required to obtain –

  • Director Identification Number (DIN) – All the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified.

Note:For DIN of Foreign Directors the proof of Identity and Proof of residence are required, Both shall be either duly notarized or shall be certified by Indian Embassy in the country of residence.

  • Digital Signature Certificate (DSC) – A DSC (Digital signature Certificate) is a very simple, secure, convenient, and a time saving way of signing electronic documents or authenticating certain online transactions. It is required to sign electronic documents, for example e-forms are required to be signed digitally using a digital signature certificate.

And the foreign director has to disclose the list of all the company, firms in which they are directors or they are interested like the Indian directors of the Indian company.

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