CAN NRI (NON RESIDENT) SETUP OPC IN INDIA?
NRIs (Non-Resident Indians) can set up an One Person Company (OPC) in India. The Companies (Incorporation) Second Amendment Rules, 2021, which came into effect on April 1, 2021, allow NRIs to incorporate OPCs in India.
To incorporate an OPC, an NRI must meet the following requirements:
- The NRI must be an Indian citizen.
- The NRI must be a resident of India.
- The NRI must have a valid passport and visa.
- The NRI must have a permanent address in India.
- The NRI must also appoint a nominee who is a resident of India. The nominee will be responsible for managing the OPC in the event of the NRI’s death or incapacity.
- The process of incorporating an OPC for an NRI is the same as for a resident Indian. The NRI must file the necessary documents with the Registrar of Companies (RoC) and pay the prescribed fees.
- Once the OPC is incorporated, the NRI will be able to conduct business in India just like any other resident Indian. However, there are some tax implications that NRIs need to be aware of when setting up an OPC.
- For example, NRIs are subject to Indian tax on their worldwide income. This means that the income generated by the OPC will be taxed in India, even if the NRI is not resident in India.
- NRIs also need to be aware of the exchange control regulations that apply to them. These regulations restrict the amount of money that NRIs can bring into and out of India.
- Overall, NRIs can set up OPCs in India. However, there are some tax and exchange control implications that they need to be aware of.
ADVANTAGE AND DISADVANTAGE OF NRI SETUP OPC IN INDIA
- Limited liability: OPCs offer limited liability to their members, which means that the NRI’s personal assets are protected in the event of the OPC’s debts.
- Simple compliance requirements: OPCs have simpler compliance requirements than other types of companies, which can make it easier for NRIs to manage their businesses.
- Tax benefits: OPCs can avail of certain tax benefits, such as the lower corporate tax rate of 22%.
- Foreign investment: OPCs can allow foreign investment, which can help NRIs to raise capital for their businesses.
- Tax implications: NRIs are subject to Indian tax on their worldwide income, which means that the income generated by the OPC will be taxed in India, even if the NRI is not resident in India.
- Exchange control regulations: NRIs need to comply with the exchange control regulations that apply to them, which can restrict the amount of money that NRIs can bring into and out of India.
- Limited options for raising capital: OPCs are not allowed to raise capital through public offerings, which can limit the options available to NRIs to raise capital for their businesses.