LLP Registration for NRIs
NRIs and Foreign Nationals starting or investing in a business in India have mainly done through a private limited company, as it allowed for 100% Foreign Direct Investment (FDI) under the automatic route for many of the sectors. Though the cost for incorporation of a private limited company is relatively low compared, the effort required to maintain compliance was an inhibiting factor. To allow NRIs and Foreign Nationals to freely invest in businesses in India and improve foreign investment, the Government has now allowed 100% FDI in LLP under the automatic route. In this article, we look at the process for LLP Registration for NRIs and Foreign Nationals.
Limited Liability Partnership (LLP) is one of the newest forms of business entity in India introduced through the Limited Liability Partnership Act, 2008. LLP registration started in India in 2008 and has quickly become popular amongst small businesses owing to the low registration cost and lesser compliance requirement when compared to a private limited company. IndiaFilings offers https://www.indiafilings.com/llp-registration starting from just Rs.7899 (approximately USD120) in India.
India Entry for NRIs and Foreign Nationals
Incorporation of Company: Incorporation of private limited company or investment in a company has been the most preferred India entry strategy for NRIs and Foreign Nationals. 100% FDI under the automatic route has been the main reasons for the popularity of private limited company amongst NRIs and Foreign Nationals.
Opening of Branch Office: Opening a branch office requires approval from RBI and is a more cumbersome process when compared to incorporation of a private limited company. Further, only well established businesses having good track record in terms of financials are allowed to open a branch office in India. Therefore, India entry through establishing a Branch Office has not been preferred by NRIs or Foreign Nationals.
Registration of LLP: Prior to November, 2015, investment in LLP by NRI or Foreign National required Government approval. This made LLP incorporation involving NRIs and/or Foreign Nationals – a long, cumbersome and expensive process. Thus company registration was preferred over LLP registration by NRIs and Foreign Nationals. With the relaxation of FDI norms in November, 2015, LLP registration can be done easily by NRIs and Foreign Nationals, making it an ideal investment vehicle for establishing a small business in India with foreign direct investment.
FDI in LLP
Post changes to FDI regulations on 10th, November, 2015, 100% FDI in LLP is now permitted under the automatic route. 100% FDI in LLP is allowed for businesses operating in sectors/activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. In addition, LLPs will also be allowed to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions. Therefore, FDI in LLP is now allowed and NRIs or Foreign Nationals can start or invest in a LLP.
LLP Registration Procedure for NRIs and Foreign Nationals
A minimum of two person are required to register a LLP in India. It is recommended that atleast one of the Partner of the LLP be both an Indian Citizen and Indian Resident – similar to the requirement for registration of company in India. The procedure for LLP registration involves five major steps namely: Digital Signature, Designated Partner Identification Number, Name Approval, Incorporation and LLP Agreement Filing.
LLP Registration for NRIs
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