Private Limited Company Incorporation with a Foreign Director or Foreign Shareholder
Indian founder plus overseas co-founder, foreign parent plus Indian subsidiary, or an NRI investor on the cap table. One engagement from apostille to FC-GPR.
A foreign national can be both a director and a shareholder of an Indian Private Limited Company. The company needs at least one director who stays in India for 182 days or more in the financial year, the foreign director needs a DIN and a digital signature backed by apostilled documents, and the foreign shareholder's money must arrive through banking channels and be reported to the RBI in Form FC-GPR within 30 days of allotment. Everything else is a standard SPICe+ incorporation.
Who this page is for
Most of the incorporation enquiries we receive with a foreign element fall into one of four situations, and the process differs slightly for each:
- Indian founder with an overseas co-founder. A Mumbai founder and a co-founder in the United States, United Kingdom, Singapore or the UAE, splitting equity 51:49 or similar, with both on the board. This is the most common case and the one this page is built around.
- Foreign company setting up an Indian subsidiary. The parent holds 99% or more, a nominee holds the balance, and at least one director is a local hire or a professional resident director.
- NRI or OCI investor. A non-resident Indian putting money in through an NRE or FCNR account, sometimes also joining the board.
- Foreign national relocating to India. Someone who will live here on a business or employment visa and wants to run the company as its resident director once the 182-day test is met.
If you only need a plain Indian incorporation with resident founders, our company registration in Mumbai page covers that. If the company already exists and you are adding a foreign investor, the FEMA and RBI compliance page is the right starting point.
What changes when a director or shareholder is foreign
The incorporation form is the same. What changes is the paperwork before it, the money route during it, and the reporting after it.
| Item | All-resident incorporation | With a foreign director or shareholder |
|---|---|---|
| Identity proof | PAN and Aadhaar | Passport is mandatory for a foreign national; PAN is applied for after incorporation if the director will receive any Indian income |
| Document attestation | Self-attested copies | Notarised and apostilled abroad, or notarised and consularised at the Indian embassy for non-Hague countries |
| Digital signature | Aadhaar-based eKYC, same day | Class 3 DSC for a foreign national with video verification against the passport, 3 to 7 working days |
| DIN | Allotted inside SPICe+ | Also allotted inside SPICe+, but on apostilled proofs; name and address must match the passport exactly |
| Subscription money | Any transfer into the company account | Inward remittance through an authorised dealer bank, which issues the FIRC and KYC report the RBI filing needs |
| Share pricing | Face value | Face value at incorporation; a CA or merchant banker valuation for every later allotment to a non-resident |
| Sector check | Not required | Confirm the activity sits under the 100% automatic route and that no shareholder is from a land-border country |
| Post-allotment reporting | PAS-3 to the ROC | PAS-3 to the ROC and FC-GPR to the RBI within 30 days, then the FLA return every July |
| Board composition | Two directors | Two directors, at least one of whom meets the 182-day resident-director test |
Sources: Companies (Incorporation) Rules, 2014, Rule 13; FEMA (Non-debt Instruments) Rules, 2019, Rule 21 and Schedule I; RBI Master Direction on Reporting under FEMA.
How we run the engagement
The sequence below is the one we use for a two-founder company where one founder is abroad. Steps 2 and 3 run in parallel with step 4, which is where most of the time saving comes from.
- Structure and sector checkDays 1 to 2
We confirm the activity is under the automatic route, look at the shareholding split, agree the authorised capital, and check whether any shareholder or beneficial owner is from a country sharing a land border with India, which would require government approval. We also settle who will be the resident director. - Document pack for the foreign directorDays 2 to 15, done abroad
Passport, overseas address proof not older than two months, photograph and specimen signature are notarised in the home country and then apostilled (Hague convention countries such as the USA, UK, Germany, Australia and Singapore) or consularised at the Indian mission (UAE, Canada and other non-Hague countries). Our DSC and DIN guide for foreign national directors lists the exact pack for each route. - Digital signaturesDays 3 to 10
Aadhaar-based DSC for the Indian director the same day. Class 3 DSC for the foreign director once the apostilled pack is in hand, with a video verification the director completes on their phone. - Name reservationDays 3 to 6
SPICe+ Part A with two name options and a trademark check. Reserved names hold for 20 days, which comfortably covers the wait for foreign documents. - SPICe+ Part B, MoA, AoA and AGILE-PRO-SDays 10 to 20
DINs for both directors are allotted inside the form. If the foreign subscriber holds an Indian DSC the memorandum and articles are signed electronically; otherwise the physically signed, apostilled copies are attached. The linked form applies for PAN, TAN, EPFO, ESIC, Maharashtra professional tax and the bank account in one go. - Certificate of IncorporationAround day 20
PAN and TAN arrive with the certificate. We draft the first board meeting minutes, appoint the first auditor within 30 days, and open the current account. - Subscription money and FIRCWithin 60 days of receipt
The foreign shareholder remits their subscription amount through banking channels. The AD bank issues a Foreign Inward Remittance Certificate and a KYC report on the remitter. Shares must be allotted within 60 days of the money arriving, failing which it has to be refunded within 15 days. - Entity Master and FC-GPRWithin 30 days of allotment
We register the company on the RBI FIRMS portal, create the business user, and file FC-GPR with the FIRC, KYC, board resolution and company secretary certificate. The AD bank verifies the filing and the RBI assigns a unique identification number to the investment. - Commencement of businessWithin 180 days
INC-20A is filed once every subscriber has paid in, with the bank statement as proof. Share certificates are issued within 60 days of allotment and the register of members is written up. - First-year FEMA and ROC calendarOngoing
FLA return to the RBI by 15 July, DIR-3 KYC for both directors by 30 September, four board meetings, and AOC-4 and MGT-7A after the first AGM. The full list is on our FEMA annual compliance checklist.
Documents required from the foreign director or shareholder
- Passport, all pages that carry personal details, with a current visa page if the person has been in India recently
- Overseas address proof not older than two months: utility bill, bank statement or a government-issued ID that shows the address
- Passport-size photograph and a specimen signature on plain paper
- Personal email address and a mobile number, which can be a foreign number; the OTPs for DSC verification and annual DIR-3 KYC go there
- Where the shareholder is a foreign company: certificate of incorporation, board resolution authorising the investment, a list of beneficial owners and the authorised signatory's passport, all apostilled
- Documents in a language other than English need a certified English translation, apostilled along with the original
Which attestation route applies
| Where the person signs | What Rule 13 requires | Typical time |
|---|---|---|
| A Commonwealth country (UK, Australia, Canada, Singapore) | Notarised by a notary public in that country | 2 to 5 days |
| A Hague Apostille Convention country (USA, most of Europe, Japan, South Korea) | Notarised, then apostilled by the designated authority, for example the Secretary of State in the USA | 7 to 15 days |
| Neither (UAE, Saudi Arabia, China) | Notarised, then authenticated by the Indian embassy or consulate | 10 to 20 days |
| In India on a valid business visa | No attestation needed if the documents are signed in India during the visit | Same day |
Commonwealth countries that are also Hague members, such as the UK and Australia, can follow either route; we ask for the apostille because banks and DSC agencies accept it without question.
Shareholding, pricing and the FEMA rules that apply
Three FEMA points decide how the cap table is built.
Subscription shares are issued at face value. Rule 21 of the Non-debt Instruments Rules lets a non-resident subscribe to the memorandum at face value, subject to the sectoral cap and entry route. So a 51:49 split on a ₹1 lakh paid-up capital means the Indian founder pays ₹51,000 and the foreign founder remits the rupee equivalent of ₹49,000. No valuation report is needed for this first allotment.
Every later allotment to a non-resident needs a valuation. The price cannot be below fair value certified by a chartered accountant, a SEBI-registered merchant banker or a cost accountant using an internationally accepted method, and the report must be less than 90 days old on the allotment date. If the foreign founder will put in more money after incorporation, plan it as a priced round rather than an informal top-up. Our business valuation practice issues these reports.
Control and land-border countries. Investment from an entity or beneficial owner in a country sharing a land border with India (China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, Afghanistan) needs prior government approval under Press Note 3 of 2020. Press Note 2 of 2026, issued on 15 March 2026, moves small non-controlling holdings below the Prevention of Money-laundering Act beneficial-owner thresholds to the automatic route with a DPIIT reporting requirement. A US or European co-founder is unaffected, but a fund investor with Chinese limited partners can be, so we check the beneficial ownership chain before allotment rather than after.
Two Companies Act points travel with these. A founders' agreement or shareholders' agreement should cover vesting, board seats and what happens on exit, because the articles alone do not. And if the foreign founder will receive equity over time rather than up front, the ESOP or sweat-equity route triggers a separate RBI filing in Form ESOP within 30 days. We set all of this out in what changes when your startup has a foreign co-founder.
Scope and fees
We quote a fixed professional fee against the scope below so the number is known before work starts. Government charges and third-party costs are listed separately and passed through at cost. The figures are indicative for a company with authorised capital up to ₹10 lakh, two directors and two shareholders, one of each being non-resident; the written quote after a scope call is the one that applies.
| Scope item | What is included | Government and third-party cost | Indicative professional fee |
|---|---|---|---|
| Structure and FEMA entry check | Sector and entry-route confirmation, land-border beneficial-owner check, capital and shareholding advice, resident-director planning | Nil | Included in incorporation |
| Foreign director document pack | Country-specific attestation checklist, review of notarised and apostilled documents before filing, certified translation coordination | Notary and apostille abroad: roughly USD 50 to 150 per person in the USA; varies by country | Included in incorporation |
| Digital signatures | Class 3 DSC for each director, video verification scheduling, USB token | Indian director ₹1,500 to 2,500; foreign national ₹3,000 to 6,000; couriered token if required | Included in incorporation |
| Incorporation (SPICe+ Parts A and B) | Name reservation, DIN for up to three directors, MoA and AoA drafting with FDI-appropriate clauses, AGILE-PRO-S, PAN, TAN, EPFO, ESIC, professional tax, bank account application, first board minutes, auditor appointment | MCA filing fee nil up to ₹15 lakh authorised capital; Maharashtra stamp duty about ₹1,300 for ₹1 lakh authorised capital, rising with capital | ₹25,000 to 40,000 |
| FC-GPR filing | FIRMS Entity Master and business-user registration, FIRC and KYC follow-up with the AD bank, board resolution, CS certificate coordination, SMF filing and AD-bank query handling until the UIN is issued | Nil (AD banks may charge a processing fee) | ₹10,000 to 15,000 per allotment |
| INC-20A and share certificates | Commencement declaration, share certificate preparation, register of members | MCA fee ₹200 to 600 depending on capital; stamp duty on certificates | ₹3,000 to 5,000 |
| FLA return | Annual return on foreign liabilities and assets on the FLAIR portal by 15 July, with revision after audit if provisional figures were used | Nil | ₹5,000 to 8,000 per year |
| DPIIT Startup India recognition | Eligibility check, pitch note, application and query response | Nil | ₹5,000 to 10,000 |
| First-year compliance retainer | Board meetings and minutes, DIR-3 KYC for both directors, AOC-4 and MGT-7A, statutory registers, FEMA calendar monitoring, TDS on any director fees | MCA filing fees on actuals | Quoted with outsourced accounting |
Professional fees exclude GST. Where incorporation is bundled with ongoing outsourced accounting or a Virtual CFO retainer, the setup fee is folded into that engagement.
Why a CA firm rather than a filing portal
A portal will incorporate the company. It will not tell you that the 30-day FC-GPR clock started when the board passed the allotment resolution, not when the bank credited the money, or that the 182-day test is being failed because both founders are travelling, or that the apostille on the passport copy does not cover the signature page. Those are the three most common problems we inherit from foreign-founder companies incorporated elsewhere, and each one costs more to fix than the incorporation cost in the first place.
KC Shah & Associates works from Andheri East and Fort in Mumbai, handles the FEMA side in-house rather than referring it out, and stays as the company's accountant and FEMA filer after the certificate arrives. The founder who incorporated your company is the one who files your FC-GPR and your FLA return.
Frequently Asked Questions
Yes. The Companies Act, 2013 has no citizenship requirement for directors. A foreign national needs a DIN and a Class 3 digital signature, both issued against apostilled copies of their passport and address proof, and the company must have at least one other director who meets the 182-day residence test in section 149(3).
Yes, as foreign direct investment under the Non-debt Instruments Rules, 2019. Most sectors, including IT services and software products, allow 100% foreign holding under the automatic route with no prior approval. Investment from land-border countries needs government approval, with a limited relaxation for small non-controlling holdings introduced by Press Note 2 of 2026.
Three to five weeks in practice. The MCA processing is no slower than for any other company; the additional time is the notarisation and apostille abroad, typically 7 to 15 days, and the foreign national's DSC, 3 to 7 working days after the video verification. We start name reservation in parallel so the wait is absorbed.
Form FC-GPR reports the allotment of shares to a non-resident to the RBI. It is filed on the FIRMS portal, verified by the company's AD bank, within 30 days of the allotment date. A late filing carries a late submission fee of ₹7,500 plus 0.025% of the amount for each year of delay, and the delay shows up in every later FEMA transaction the company attempts.
No. Shares issued to a non-resident as subscription to the memorandum are issued at face value under Rule 21 of the Non-debt Instruments Rules. Every subsequent allotment to a non-resident needs a fair-value certificate from a chartered accountant, merchant banker or cost accountant that is less than 90 days old.
No. Apostilled documents and an online video verification for the DSC cover everything. If the director happens to be in India on a business visa when the incorporation documents are signed, Rule 13 of the Incorporation Rules waives the notarisation and apostille requirement for those documents.
Yes. Sitting fees, commission and remuneration to a non-resident director are permitted current-account payments under FEMA and can be remitted abroad. Tax is deducted under section 393(2) of the Income-tax Act, 2025 at the rates in force, reduced by the applicable tax treaty if the director provides a tax residency certificate and Form 10F, and the director needs an Indian PAN. Form 15CA and 15CB accompany the remittance.
Yes. Recognition depends on the entity being an Indian Private Limited Company, LLP or partnership less than ten years old with turnover under ₹100 crore, working on innovation or a scalable business model. The nationality of the shareholders is not a criterion. See our DPIIT recognition guide.