Companies (Second Amendment) Bill, 2019 amend the Companies Act, 2013 which necessitates Indian companies to be listed on international stock exchanges. Indirectly, it progresses Indian companies efficacies in terms of admit to financing, stronger valuations and a broader base of investors.

The Indian company’s law does not bar foreign nationals to get appointed as a director in Indian companies.

Who is the Director?

A person who acts on behalf of the company irrespective of any kind of transaction and be treated as the head of a company. If a director has an interest in any transaction, disclosure is a must to provide. Directors are the brain that supplies the ideas to the company and took all the decisions in relation to business affairs.

Director move as an agent together with the trustee of the company. An authority that controls and manages the company’s affairs.

Abilities of Directors

Below are the powers and abilities a director should meet up with the following duties,

  1. Conduct whether Board, Annual General, and Extraordinary General Meeting.
  2. Appoint the Auditors whether First, Subsequent and Cost Auditor.
  3. Arranging and processing all annual related documents i.e., Financial Statement, Company Report, and Board Report.
  4. Keep away conflict of interest with the company.
  5. Process reasonable care and due diligence for continuous operation of the company.

Directorship of Foreign National in an Indian company

A foreigner can be executive as well as non-executive director of Indian companies whether public or private. It doesn’t matter the director is Indian or foreigner, the duties of both will be the same.

1. Appointment of directors under Section 152

There is almost numerous sort of directors that can be appointed in a company as per the legal provision of Companies Act, 2013. Such are Independent Director, Women Director, Small Shareholders Director, Additional Director, Nominee, and Alternative Director. Companies Act does not restrict foreign director to be appointed as directors of the above categories in Indian Companies.

2. Subsequent criteria to be fulfilled by a person including foreign national to become a director

*Every person, including a foreign national, shall make an application for obtaining DIN in form DIR-3 along with the fees before being appointed as a director.

*The person, including a foreign national appointed as a Director shall not act as a director unless he gives a declaration stating therein that he is not disqualified as well as his written consent to act as director in Form DIR 2. After receipt of consent, it has to be filed with the Registrar office within 30 days of his appointment.

3. Foreign National as a Director under the Foreign Exchange Management Act (FEMA), 1999

As per the Companies Act and FEMA, there is no bar for a foreign national to become a director in an Indian Company. He is entitled for all kinds of commission, sitting fees, travel expenses, remuneration same as Indian directors. But, according to FEMA, a foreign national cannot hold a property situated in India.

A foreign director in an Indian company can control and sustain a foreign currency bank account outside India and receive the entire salary due to him for his services. A foreign national wants to become a foreign director in an Indian company will mandatorily take a valid employment visa.

4. Key points for company registration with Foreign Directors

Some of the information on a serious note to be kept in mind mentioned below,

  • Every document of directors should be self-attested. The passport of foreign directors should be an apostille and notarized in the home country. If not so, then notarize in India.
  • If a director already hold a DIN, then proper specification and details are required for particular DIN.
  • If a foreign director also holds the shares then in that case also proper specification is required to be given by the foreign director.

Note- Attestation can be done through Public Notary or Indian gazette officer or a PCA/PCS/PCWA if a foreign director is a person of Indian origin card.

Documentation of foreign director

In the case of foreign national applying for DIN to become a foreign director in an Indian company, documents which are required are mentioned underneath:

  1. Details of a valid “passport” in DIR-3, which is to be verified by PCA, whole-time Company Secretary, M.D. or director of the company
  2. Photograph
  3. Proof of identity and residence
  4. Specimen signature properly verified


For incorporating an Indian company with foreign directors, following are the steps to be followed one by one,

  1. Obtain Digital Signature for Foreign National directors and other Indian directors. All the documents i.e., id proof, address proof (Resident permit certificate), the photo should be attested and apostilled by the competent authority, in case of foreign director DSC.
  2. The next step is to file the name approval form which is required to reserve the name of the company registration for the next 20 days. The name should be unique.
  3. Once the name get approved, all the required documents i.e., authorization letter, specimen signature, NOC, INC-9, DIR-2, declaration, rent agreement (if rented property) is to be prepared and submitted through Spice form on MCA website.
  4. Prepare the objectives i.e., MOA where foreigners or Indians can become shareholders. There is no restriction being as a shareholder in the Indian company.
  5. If any foreign company becomes shareholder then,
  • Board resolution of a foreign company
  • COI of a foreign company
  • Address proof of a foreign company is required
  1. Now, submit the forms by uploading on the MCA website and wait for the department approval for MCA registration.

Time period

Department hardly takes 4-5 days from the date of application to generate a Certificate of Incorporation.

Output documents

  1. Certificate of Incorporation
  2. PAN allotment letter
  3. TAN allotment letter
  4. The bank account will be opened, details will be sent on registered mail id
  5. PF and ESIC certificate
  6. GST certificate, if opt yes for registration
  7. DIN number i.e., Director Identification number
  8. Digital Signature Certificate (DSC)


Incorporating an Indian company is far easy and faster than a foreign company. Incorporation or commencing of the company with foreign directors is not limited, though a person has to comply with the required conditions. Foreign nationals can be either an executive and a non-executive director. There is no change in procedure for appointment of the foreign director, it is as same as the Indian director with extra papers and submission like notary and apostille of documents are required to authenticate the documents by Embassy.

For communication: Email Id and Phone Number 9540026175.

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17 Jun

Ayushi Agrawal
CS Ayushi Agrawal

All in Startup: Launching a New Idea When Everything is on the line!! But doing something that isn’t done before takes the world from zero to one. NEUSOURCE takes an progressive approach to building startups. THINK OUTSIDE THE INBOX!!