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Incorporation of a new company- all promoters are nri's

Hashim Wafa (Corporate Law Professional) (34 Points)

24 July 2012

Dear All,

We would like to form a Private Company in which all the promoters are NRI's.

Can you please guide me is there any additional approval or procedure to be taken for Incorporating a Pvt Company in which all the promoters are NRI'S

Thank you in advance.

Hashim Wafa

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3 Replies

Ganeshbabu K (Audit and Tax Advisory) (48564 Points)
Replied 24 July 2012

go through with this discussion

hope it will help u

/forum/subscripttion-of-moa-by-an-nri-38455.asp#.UA5NMlJvXmc

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Charu Srivastava (Company Secretary) (4210 Points)
Replied 24 July 2012

NON-RESIDENT INDIAN AS SUBSCRIBER TO THE MOA/AOA

The Reserve Bank of India had given general permission under section 29(1)(b) of the former FERA, 1973 to NRI to subscribe to the MOA of an Indian company and to take shares as a subscriber .(Notification No. FERA 143/93-RB, dated 26-4-1993 issued by RBI, Mumbai in this regard is reproduced hereunder:

“The RBI has given general permission to NRI to subscribe to the MOA/AOA of Indian Company for the purpose of Incorporation of the company subject to the condition that:-

(a) the total face value of the shares to be taken by NRI does not exceed Rs. 10,000

(b) the company is being manly formed for undertaking industrial activities

(c) the MOA of such company does not permit the company to take up any agriculture/plantation activities and to deal in real estate business other than developing real estate, and

(d) such company shall file a declaration in the prescribed form with the RBI regarding particular of such shares issued within 900days from the date of incorporation of the company.

DCA Circular dated 16-2-1995 clarifies that there can not be any restriction for incorporation of a company whether all the subscriber to the MOA/AOA/ proposed directors are residing abroad, being either foreign nationals, or NRI subject to the approval of RBI, where necessary.

The RBI may issue such a general permission also under FEMA, 1999 also. The FEMA(Permissible Capital Account Transactions) Regulations, 2000 allow persons resident outside India to invest in an issue of security by body corporate or an entity in India.

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 25 July 2012

A company may be incorporated with all the foreign subscribers. Just the inward of remittance and allotment of shares are to be intimated to the RBI accordingly.