Can a Foreigner be a Director of the Indian Company

Company being an artificial person has to be run, managed and controlled by a real person. These officials who manage a company are called directors and are the head of the company. They are the ones responsible for all the managerial and other official affairs in the company.

In this post, our special focus will be one can an NRI be a Managing Director of an Indian company or can a foreigner be a director of an Indian company.

NRIs and directorship in Indian firms

In India, as per law, a foreign national can become a director in an Indian company whether it is a public or private company provided at least one of the directors in the company is on Indian nationality. Share below are the laws in relationship with Foreign Nationals Director in Indian Company.

Criteria to Become a Director Under Companies Act, 2013

  • Director has to be a major, i.e. above 18 years and has to be a natural person.
  • There is no restriction on becoming a director of an Indian company because of nationality.
  • An NRI or foreign director is eligible to become an executive or non-executive director.

Steps to Follow for Foreign National to Become a Director

We have come up with essential steps for becoming a foreign national to become a director in Indian company:

Director Identification Number

  • Before being appointed as a director, it is mandatory for the foreign national to have a Director Identification Number (DIN).
  • This is allotted by Central Government against the application of allotment of DIN filled by person who intends to become a director under Sec 153.
  • Electronic Form DIR- has to filled and submitted along with fees of Rs.500.
  • Form DIR-3 can be downloaded online and has to be submitted electronically along with a photograph, proof of identity and residence, Form DIR-4, duly verified digital signature.
  • Details of valid passport have also to be submitted in Form DIR-3. The certified copy of the same is also to be attached with DIN application.
  • Digital verification of Form DIR-3 can be done by a practicing CA or CS or Cost Accountant. It can also be verified by CS of the company or MD or director of the company for which applicant is applying for directorship.
  • Once DIN application is submitted online, provisional DIN gets generated automatically.
  • Person is not allowed to use provisional DIN until approved and confirmed by Central Government.
  • The Central Government issues DIN within one month from issuing the receipt of application.
  • In case Central Government finds any defect then the same is communicated using email or putting it on website asking to rectify the errors within 15 days.
  • In case the person doesn’t rectify the defects within 15 days, the application becomes invalid along with provisional DIN.

Foreign National as Independent Director

  • Foreign national must possess experience and knowledge in more than one fields of management, sales, finance, marketing administration, technical operations etc. which are related to the governance of the company.

Foreign National as Managing Director

  • He should be a resident of India. He should be staying in India at a stretch for at least 12 months immediately after date of appointment.
  • He should be between 21 to 70 years of age.
  • He should not have convicted any offence for duration of over 6 months.
  • In case the above mentioned criterion is not fulfilled then approval from Central Government is needed.

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