NRI, OCI, PIO & FOREIGN CITIZENS BUSINESS STARTUP IN INDIA (2024)

FAQs

Can I run a business in India on OCI? ›

Process of Company registration in India by an NRI or OCI

Now you can Incorporate a Private Limited Company, with a Single application for Name reservation, Incorporation, DIN allotment, Mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra), and Opening of Bank Account.

Types of Companies NRIs and Foreign Nationals can Register in India. Sole proprietorship, partnership, and one-person company structures are not allowed for NRI and foreign investors. However, The Companies Act 2013 provides for the setting of the following types of companies: Limited Liability Partnership (LLP)

In general, a PIO and NRI can invest in India in any form in any business in which an ordinary Indian can invest, however on non- repatriation basis. Unlike foreigners who require business visa to do business in India, the NRI and PIO can do any business without any such requirement.

The answer is yes They Can Easily Open a Company in India, as Companies act 2013 Permits, foreign Residents, to open a company legally in India when they comply with laws in India.

Yes! You can work in India with an OCI card. The OCI card or Overseas Citizenships of India card is a lifelong visa that gives you the chance to work or live in India. Also, you can enter India at all the times you would like.

“NRIs can also form partnership firms where the firm should have at least one resident Indian partner. They can also open a private limited company or a limited liability company,” said Suneel Dasari, founder and CEO, EZTax.in, an online income tax filing portal.

According to Article 15 of the DTAA, a person who is a particular country's resident but has income from a foreign country source, his income would be taxed 'only' in the residential country. This means if an NRI works in the US and his income comes from an Indian source, he has to pay only US taxes.

When NRIs invest in certain Indian assets, they are taxed at 20% on the income earned. If the special investment income is the only income the NRI has during the financial year and TDS has been deducted, then such an NRI is not required to file an income tax return.

Indian Immigration will accept all Person of Indian Origin (PIO) cards (including handwritten ones), along with valid foreign passport, as a valid travel document till December 31, 2023.

What are the rights of Pio card holder in India? ›

PIO Card can be used as identity proof for applying for a (I) PAN card, (II) driving license and (III) opening of Ban account in India, if the PIO card holder resides in India.

The same gets applied for NRIs and PIOs as well. Hence, being a Non-Resident (NR) or Not Ordinary Resident (NOR) (or sometimes Ordinary Resident 'OR'), NRIs and PIOs can be defined as NR or NOR (or OR) and accordingly tax also gets levied.

Almost all sectors (except for few prohibited sectors) can welcome Foreign companies to set up business in India via FDI (either through the Automatic Route or through the Government Route) A PLC must have at least two shareholders and can have a maximum of fifty shareholders.

There are no restrictions in terms of citizenship or residency. Therefore, NRI or foreign nationals can be directors in an Indian Private Limited Company. But at least one of the directors in the board of directors must be a resident of India.

There is no separate procedure to be followed for filing tax returns in India as an Overseas Citizen of India card (OCI) holder. He can continue filing returns in India as a non-resident. Further, his PAN and Aadhaar are valid as an OCI.

(ii) A PIO cardholder is required to register with local Police authority for any stay exceeding 180 days in India on any single visit whereas an OCI is exempted from registration with Police authority for any length of stay in India.

Taxation of the LLC

LLCs are taxed as pass-through entities by default, except in the case of the C-Corp. That is, the profits of the business are "passed through" to the members. Profits and losses are reported on the owners' individual tax returns since it is a pass-through entity.

The main disadvantages of limited liability companies are the fees and taxes associated with the business structure. However, as LLCs are governed differently by each state, regulations also become a disadvantage.

Can a US company operate in India? ›

A foreign company can register a liaison office, project office or branch office in India to carry on its operations in India. However, opening these offices requires RBI or government approval.

NRIs have to pay income tax on income earned in India. NRIs have to pay tax on income that accrues or arises in India. NRIs also need to pay tax on income which is deemed to accrue or arise in India. Money received or deemed to be received in India is taxable.

The foreign income i.e. income accruing or arising outside India in any financial year is liable to income-tax in that year even if it is not received or brought into India. There is no escape from liability to income-tax even if the remittance of income is restricted by the foreign country.

Sending money from the US

When you send money from US to India, the relationship between the sender and receiver is not important. The maximum tax-free amount you can send in a year is $14,000. Up to $14,000, no tax is charged. Beyond that amount, it would be subject to gift tax for the sender.

An RFC (Resident Foreign Currency) Savings Account is a savings account maintained in foreign currencies - USD and GBP - for NRIs who have returned to India and hold funds in foreign currency.

2. Can an NRI maintain multiple accounts with different banks in India, simultaneously ? Ans.: Yes, there is no prohibition to open and maintain multiple accounts a/cs.

Prone to risk

Deposits made in foreign currencies in an NRE account are subject to conversion into Indian rupees. Hence, such deposits might fluctuate in value due to appreciation of domestic currency (or depreciation of foreign currency), thereby incurring losses during repatriation.

It is extended to 120 days for an individual, being Indian citizen or person of Indian origin (PIO), who is based outside India and comes on a visit to India, if total income of such person, other than income from foreign sources exceeds ₹15 lakh (120 days rule).

So if you are an NRI and you have earned a salary for the services that you rendered in India, it shall be taxable in India, and the income tax for NRI shall be as per the income tax slab. The NRI income tax slab rates shall be the same as that of the resident taxpayers.

As per the DTAA agreement between India and the USA, the same income is not taxable in both countries. Thus, if you have paid tax on such income in USA, you can claim the credit of such tax paid by filing Form 67.

How do I get a PIO card in USA? ›

There are 2 ways in which you can apply for a PIO application: in person or by post. An appointment is required for the PIO card application and the applicants are required to be at the VFS Application Centre at the time of appointment if they plan to apply in person.

A PIO is permitted to open bank accounts in India out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India, with Authorised Dealer (AD). Such accounts can be opened with banks specially authorised by the Reserve Bank of India (RBI) in this behalf.

However, it is strongly recommended that all persons having valid PIO cards apply for conversion of PIO to OCI card. The Bureau of Immigration will accept PIO cards as valid travel document till 31st December, 2022, along with valid foreign passport.

The OCI card benefits refer to the rights you gain, like working rights, living as a resident, and entering India as many times as you want. One of the major drawbacks is that you must surrender your Indian passport as India doesn't accept dual citizenship.

Applicants may complete the online application form on the Government of India OCI portal https://ociservices.gov.in/ and note down the USAN*** No. Once filled take a printout of the filled application.

NRI and PIO

An Indian citizen resident outside India or a PIO does not require any special permission to buy immovable property in India. However, no payment of the purchase price can be made in foreign currency.

Q. Can an Overseas Citizen of India (OCI) card holder or NRI buy/sell real estate in India? A. As per the guidelines issued by Reserve Bank of India, an NRI or OCI card holder can invest in any residential or commercial property.

Bhide says that most Indian firms in his study required an average startup capital of about Rs 375,000 ($8,300), whereas the average (non-IT) US startup needs about $10,000. With purchasing power benchmarks, Indian firms shouldn't need more than about $1,500-$2,000 equivalent as startup capital.

Who is eligible for startup in India? ›

Start-ups are required to obtain approval from the Inter-Ministerial board under the Department of Industrial Policy and Promotion (DIPP). Recommendation of an incubator from any post-graduation college. Recommendation from an incubator recognised by the Central Government.

Process of Company registration in India by an NRI or OCI

Now you can Incorporate a Private Limited Company, with a Single application for Name reservation, Incorporation, DIN allotment, Mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra), and Opening of Bank Account.

In India, small businesses can be run without registering, but it is recommended to register the company to obtain certain benefits and to ensure legal compliance.

To form a One Person Company anywhere in India, the concerned director/member must be either an Indian citizen or a Resident in India. A minor, foreign national/citizen, or NRI are restricted from establishing an OPC in India.

Overseas Citizenship of India (OCI) is a form of permanent residency available to people of Indian origin and their spouses which allows them to live and work in India indefinitely. Despite its name, OCI status is not citizenship and does not grant the right to vote in Indian elections or hold public office.

There is no need for the POA to be apostilled for Indian Passport holders and OCI/PIO card holders. However, the POA document must be duly notarized.

An OCI cannot vote in Indian elections, cannot acquire farmland etc. However, an OCI is entiitled to work in India, subject to restrictions imposed by professional bodies, such as the Bar Council of India or the Institute of Chartered Accountants. Under the Advocates Act 1961, only Indian citizens can be advocates.

The OCI is not entitled to vote, be a member of Legislative Assembly or Legislative Council or Parliament, cannot hold constitutional posts such as President, Vice President, Judge of Supreme Court or High Court etc. and he/she cannot normally hold employment in the Government.

OCI holders do not require employment visa to work in India and may work in a private sector.

There is no separate procedure to be followed for filing tax returns in India as an Overseas Citizen of India card (OCI) holder. He can continue filing returns in India as a non-resident. Further, his PAN and Aadhaar are valid as an OCI.

What OCI can do in India? ›

The OCI card offers utmost convenience to those foreign individuals who intend to reside in India but still maintain their citizenship in another country. Section 7 B of the Citizenship Act allows the individual multi-purpose, multiple entries and a lifelong visa for visiting India.

(i) An OCI is entitled to life long visa with free travel to India whereas for a PIO card holder, it is only valid for 15 years.

A. As per the guidelines issued by Reserve Bank of India, an NRI or OCI card holder can invest in any residential or commercial property. The guidelines also state that one can buy any number of residential or commercial properties.

An OCI card holder is entitled to life-long visa with free travel to India whereas for a PIO card holder, it is only valid for 15 years.

Payment can be made in cash, money order, cashier's check, or banker's check. If applying by post cash is not accepted. No personal checks are accepted. Non-US passport holders and non-USA nationals residing in the US for less than 2 years have to pay $20 additional fee as reference fee.

You must demonstrate the following in order to be eligible for a B-1 visa: The purpose of your trip is to enter the United States for business of a legitimate nature. You plan to remain for a specific limited period of time. You have sufficient funds to cover the expenses of the trip and your stay in the United States.

OCI can be used as identity proof for application of PAN Card and driving license as well as for opening a bank account if the OCI card holder is residing in India.

A: OCI card holders can purchase residential and commercial properties in India. But they are not permitted to purchase agricultural land, including farmland or any kind of plantation property. Q: Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?

Can an OCI buy medical insurance in India? An Overseas Citizen of India (OCI) can buy medical insurance in India as per the prevailing terms and conditions.

Kindly note that normal processing time for a new OCI application (based on Indian origin) is 4-5 weeks from the date of registration of the application in the Consulate whereas for re-issuance/updation of OCI Cards, it is 5-6 weeks.

Does OCI expire? ›

Posted by Frank Gogol in Immigrants | Updated on November 15, 2022. At a Glance: OCI cards are issued for the lifetime of the holder and do not expire.