TAXAJ

Resident & Nominee Director for Foreign Company

As per the Companies Act, 2013, the Act does not restrict foreign individuals to become a director in the company situated in India. The foreign individual or non-resident Indians residing out of India can become an executive or a non-executive/independent director of Indian companies whether public listed or unlisted or private. As per section 2(34) of the Companies Act 2013, the “director” means a director appointed to the Board of a company.

The foreign individuals or a non-resident Indian can be appointed as a Director in the Company by complying with the Act read along with the Companies (Appointment and Qualifications of Directors) Rules, 2014.  A foreign national can be appointed to the positions of Women Director, Independent Director, Small Shareholders Director, Additional Director, Alternative and Nominee Director in Indian Companies.

The foreign national or a non-resident Indian can also be appointed as a Whole Time Director (“WTD”) or Managing Director (“MD”) subject to the compliance of rules given in Part 1 of Schedule V of the Companies Act, 2013 which defines the qualification for appointment of a Managing or Whole Time Director or a Manager without the approval of Central Government. One of the conditions of Part 1 of schedule V of the Act states that a person appointed as whole time director or managing director should be a resident of India.

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"Our experience in managing the needs of international business and acting in the capacity of resident director for Australian subsidiaries of overseas entities is second to none."

For any overseas company looking to establish an Indian Subsidiary, it is a necessary and a regulatory requirement to appoint a resident director. Securing your business in India can be a daunting task, and we are here to support you with your business decisions by providing you with the guidance needed to get it right the first time. We can help you with the below mentioned services and more:

  • Incorporation of Indian Entity, including managing the setup of Indian Tax Office.
  • Oversee Banking requirements in the initial setup
  • Provide appropriate indemnities to protect the resident director and ensure non-resident directors have complete control over the Indian  operations
  • Arrange for your Indian operations to have a substituted year-end in line with head office operations
  • Implement financial control and systems to manage the accounting affairs of the Indian operations in line with the reporting
  • requirements of your head office operations
  • Provide our expertise to manage the day-to-day accounting needs of the Indian operations
  • Manage the ongoing financial reporting and tax compliance needs of the Indian operations to ensure the company’s affairs are accurate and lodged on time to the necessary regulatory bodies
  • Provide consultative advice and support for the successful growth of the Indian operations

What will the nominee director or Shareholder require before agreeing to act?

A nominee director will generally require you to:

  • Provide them with an overview of the company’s current and proposed activities;
  • Provide your business plan, forecasts and budgets;
  • Provide any advice that you have that confirms the activities of the company comply with Indian local laws, (e.g. local licensing requirements, consumer laws, importation laws, tax laws, TGA approvals, etc)
  • Provide evidence of your financial standing, or the financial standing of the foreign company holding the shares in the Indian company – to show that the company will remain solvent;
  • Confirm that the company has appointed a local accountant and Tax Agent;
  • Agree to provide regular financial and operational reports, and to provide them direct access to your local accountant and Tax Agent;
  • Agree to their fees and charges for acting as a director; and
  • Agree to indemnify the company and the nominee director for any liabilities that the company is not able to meet in India, in order to avoid insolvency. This will generally make either you, or the foreign parent company, liable for the debts and obligations of the Indian company.

We will only provide Nominee Director Services on the following conditions:

    • We receive the proof of identity and proof of address (utility bill/bank statement not older than 3 months) on the beneficial owner. Scan copy to start the process but we will require certified original copies by post within 2 weeks.
    • Reference letter on the UBO from the bank, employer, accountant OR solicitor who has known him/her for over 2 years.
    • We will need to know reasons for requiring a Nominee Director
    • We will need to know the nature of the business
    • The company's registered office should be with us
    • We expect to see relevant information on how the business is being conducted. The annual accounts of the company should be done with us as the director needs to sign the accounts.
    • If the company is GST registered, the GST returns must be done by our accountant.
    • In the case the client wants to dissolve the company, he must inform us. We will terminate ourselves and will not act as a director at the time of dissolution if the company is older than a year.


    A Nominee Shareholder would represent the shareholder of the company and will be used for security reasons to protect the personal information of the actual shareholder. A contracted Nominee Shareholder will disclose the necessary information such as ID and passport numbers without you having to share what you do not want to.

    Contracting a Nominee Shareholder requires you to protect your rights to your shares with Nominee Shareholder issuing a Declaration of Trust that certifies your full ownership of your shares while the nominee represents you.


Other Foreign Company Services:

For any overseas company looking to establish an Indian subsidiary, we can provide a number of additional business registration and support services as required.

 These services include the following (however additional services can be arranged on as needed basis):

  • Establishment of a new Private/Public Limited Company
  • Registration for GST (Goods and Services Tax)
  • Opening of a business bank account
  • Provision of a Registered Office Address in India
  • Provision of a business address facility in India
  • Related corporate secretarial services

 

For further information about our services including pricing please contact us.

Are you looking for Resident Director in India?

As per the provisions of sub section (3) of section 149 of companies Act, 2013, Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two (182) days in the previous calendar year. This Provision applies to all the companies w.e.f. 26th June, 2014. Wholly owned subsidiary Companies with only Foreign Directors are mainly impacted by this provision of companies Act, 2013.

Power and Duties of Nominee/Resident Director:

Resident/ Nominee Director shall have all the power and duties which are define for other Director of the company but subject to the approval of Board. He shall abide by all the provision for directors defines under Companies Act, 2013.

Penal Provisions

If a company contravenes this provision of companies act, 2013 then the company and every officer of company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

How TAXAJ can help?

    • We will appoint one of our team members as the Resident Director for your company.
    • Nominee director appointee will neither be a corporate bank account signatory nor play a active role in our your business.
    • Nominee director merely the resident director of the company in order to fulfill the local statutory requirement (law of land requirement).
    • You will be solely responsible for daily business activities.
    • You will sign a legal contract outlining the terms and conditions and limitations of the resident director’s appointment.
    • You can ask our nominee director to resign at any point of time.
    • Nominee director will sign all the key corporate documents which are obligatory to be signed by the director to comply with the law of land.


    For example: Annual return, Financial Statements and other key docs as may be required by law.

    • You must have a vigorous system to comply with the law of land. You may ask for our annual compliance and maintenance of statutory records & registers services.
    • Our fees for resident director services will depend upon the level of risk in the business the same shall be provided upon request.
    • Our client may also avail the service of shareholder as well as Annual Compliance Services.