How to start a company with a Foreign Director?
In today’s internet and global era the world has come closer and has become a single place to do business. In such times opportunities knock at odd hours and many a times foreigners coming to visit India or having contacts via different mediums of communication want to open up businesses in India with the help of a local partner. At this moment questions such as “How do I register my company with a Foreign Director?” or “Is it possible to start a company with a foreign director?” are asked.
There are two types of situations that arise from such a requirement, one in which the foreign director is not in India and wants to be a director from his home country and the second in which the foreign director is in India and wants to start a company. As per companies act it is mandatory to have a local resident as one director at least to be able to incorporate a company. The minimum requirement of ownership by the local citizen changes as per the industry the business is going to operate in. Foreign direct investment policy of the Ministry of Commerce & Industry has elaborated it in detail.
Lets discuss more about the situations where a company is to be registered with a foreign director:
❯ When the foreign director is in his Home Country:
The incorporation process does not change and the basic documents required is the same and equivalent to the document issued in the home country. What changes is the process of authentication of the documents. The process of authentication under various circumstances is described further:
- If foreign director is from a country which is party of the Commonwealth –
Self-attestation of all documents along with notarization from Notary (public) from that part of the commonwealth.
- If foreign director is from a country part of the Hague Appostile Convention, 1961 –
Self-attestation of all documents, notarization from Notary (public) of the country of origin and appostiled in accordance with the Hague Convention.
- If foreign director is from a country outside of the Commonwealth and is not part of the Hague Convention 1961 –
Self-attestation of all documents, notarization from Notary (public) of the country of origin. Further the certificate of the Notary (public) shall be authenticated by a Diplomatic and Consular officers or where there is no such officer by any of the officials mentioned in the section 6 of the Commissioners of Oaths Act.
❯ When the foreign director is in India:
The primary or the most important requirement for a foreign citizen visiting India is to possess a business visa. A copy of the business visa is to be furnished along with all the documents. All the other document requirement is the same and equivalent to the document issued in the home country which are required to be self-attested and attested as per the requirements in India.
Apart from the above mentioned differences the process of incorporation of a company in India is the same as it is for a company with all local directors.