Can an NRI or Non-Resident Indian Start an OPC in India?

Last Updated on September 10, 2026

With increased opportunities for NRIs to invest in enterprises in India, the One Person Company (OPC) has become a viable company structure for NRIs eligible under this classification. An OPC allows the incorporation of a business entity having its own identity but limited liability. This ensures the retention of more control and ownership. Nevertheless, it is necessary for the NRI to incorporate an OPC in accordance with the Companies Act of 2013 along with all relevant tax laws and FEMA. It is essential for NRIs to understand their eligibility to incorporate and operate the OPC.

What is an OPC?

A One Person Company (OPC) is a type of company created under the Companies Act of 2013 that allows a single person to establish and operate a business with its own legal personality. It combines the advantages of a corporate structure with individual ownership.

Features:

1. Single member: An OPC has only one member who owns the company’s stock.
2. Separate legal entity: The OPC has a legal personality separate from its members, and it can possess property, enter into contracts, and file legal processes in its own name.
3. Limited liability: A member’s obligation is often restricted to the amount unpaid on their shares.
4. Nominee: The lone member must designate an eligible individual who can become the member in case of the member’s death or incapacity.
5. Minimum directors: An OPC must have at least one director, while the lone member may also serve as the director.
6. Perpetual succession: The company continues to exist notwithstanding changes in membership caused by death or incapacity.
7. No public subscription: An OPC cannot invite the public to buy its securities.
8. Suitable for individuals: It is especially handy for entrepreneurs who seek the benefits of a corporate structure while maintaining sole ownership.

Who is an NRI?

An NRI is an Indian citizen who stays outside of India. The term is commonly used when referring to Indians who have moved abroad for employment, business, study, or any other reason and retain their Indian citizenship.

1. Indian citizen staying outside: In many cases, an NRI refers to an Indian citizen who stays outside of India for a specified period or on certain grounds.
2. Residence criteria: The question of whether a person qualifies as a non-resident in terms of tax regulations and legislation depends on particular circumstances and regulations. Under the Income-tax Act, 1961, the status of residence is mostly defined depending on the personal presence of an individual in India throughout the tax year.
3. Not the same as citizenship: NRI status concerns mainly residence and not citizenship. While an Indian citizen can become an NRI, a holder of an OCI card and a foreign citizen cannot qualify as an NRI due to having Indian roots.
4. Legal limitations: There might be certain legal restrictions on NRIs’ bank accounts, investments, taxation, real estate, and business activity in India.
5. Entrepreneurship: Subject to particular laws, NRIs are allowed to make investments in or set up certain companies in India, including OPCs.

Eligibility For an NRI to Incorporate an OPC in India

1. Indian citizenship: The guidelines allow only those NRIs who are natural persons and citizens of India to set up an OPC. This specifically excludes OCI cardholders and PIOs even though they have Indian origin; only Indian citizens qualify; OCI/PIO status doesn’t meet the citizenship requirement.
2. Residency status: Citizenship, not physical stay in India, is what determines eligibility. The Companies (Incorporation) Second Amendment Rules, 2021 allow an Indian citizen to incorporate an OPC ‘whether resident in India or otherwise,’ meaning residency isn’t a condition of eligibility at all. The rule separately defines ‘resident in India’ as someone who has stayed in India for at least 120 days (reduced from 182 days) during the preceding financial year, but this is a definition used elsewhere in company law, not a stay requirement an NRI must satisfy to form an OPC.
3. Requirement of nominee: The member should name an eligible individual as a member of the OPC in case of his death or incapacity.
4. Natural person: Only an individual shall be allowed to be the member of the OPC. It means that a company, LLP or any body corporate shall not be permitted to be the sole member of the OPC.
5. No minors: Minors shall not be permitted to be members/nominees of the OPC.
6. Only one OPC: In general, an individual may not hold membership in multiple OPCs.
7. The laws: Though NRI OPC registration has been made permissible, the new venture will need to abide by the requirements of the Companies Act, FEMA, foreign investment and sectoral regulations, if any, applicable in the matter. Whether the NRI’s investment in the OPC counts as FDI (subject to sectoral caps and reporting) depends on whether the funds are brought in on a repatriable or non-repatriable basis. Non-repatriable investment is generally treated as domestic investment with fewer restrictions, while repatriable investment follows standard FDI rules. This distinction affects both compliance and future fund-repatriation options.
8. Effective from 2021: The eligibility for NRIs was introduced through the Companies (Incorporation) Second Amendment Rules, 2021, effective from 1 April 2021.

Does the OPC Still Need an India-Resident Director?

Yes. Separately from OPC-specific eligibility rules, Section 149(3) of the Companies Act requires every company, including an OPC, to have at least one director who has stayed in India for 182+ days in the financial year. If the NRI member will also serve as the sole director and doesn’t personally meet this threshold, the OPC must appoint an additional resident director purely to satisfy this requirement; this person needn’t hold shares or take part in management decisions. This is separate from, and in addition to, the OPC’s own 120-day “resident” definition discussed above.

Documentation for an NRI to Incorporate an OPC in India

1. Proof of identity: A valid passport is usually needed for an NRI subscriber/director. PAN card and other proof of identification may be asked for incorporation.
2. Proof of address: Recent residential proof of address should be provided by the NRI, and relevant overseas address details may be required.
3. Photo: A current passport-size photograph might be needed as part of the incorporation documents.
4. Proof of registered office: The company should submit the relevant proof of its Indian registered office, such as a utility bill, ownership/lease documents and an NOC, if applicable.
5. Nominee documents: Every OPC must have an eligible nominee. The relevant nominee should have identification and residency proof.
6. MOA and AOA: The Memorandum of Association (MOA) and Articles of Association (AOA) of the proposed company need to be prepared.
7. Relevant declaration and consent: Declaration, subscriber details and consent from the nominee are mandatory.
8. DSC and incorporation forms: The DSC and relevant MCA incorporation forms, including SPICe+, are needed.

The foreign documents may need to be notarised, apostille/consular attested and certified as per the requirement.

Can an NRI Incorporate an OPC in India? If Yes, Then How? – Process of OPC Incorporation

Yes. An NRI who is an Indian citizen is eligible to form a One Person Company (OPC) in India. This is made possible by the Companies (Incorporation) Second Amendment Rules, 2021, which will be effective from April 1, 2021.

PROCEDURE:

1. Check eligibility: The member should be a natural person and an Indian citizen. NRIs are allowed to incorporate an OPC, provided that all requirements are fulfilled.
2. Residency clarification: The 2021 amendment expressly permits Indian citizens to form an OPC ‘whether resident in India or otherwise,’ so an NRI’s actual days spent in India have no bearing on eligibility to incorporate. The 120-day threshold (lowered from 182 days) only defines what ‘resident in India’ means for other purposes under the Companies Act; it isn’t something the NRI needs to plan their travel around before incorporating.
3. Nominee Selection: The OPC should have a nominee who will take over the sole member’s position in the event of his/her death or inability. The nominee should qualify under all eligibility requirements.
4. Obtain DSC and DIN: The proposed director should obtain the required Digital Signature Certificate (DSC) and Director Identification Number (DIN).
5. Name reservation: The chosen name is reserved by using the prescribed procedure for name reservation under the MCA.
6. Prepare incorporation documents: The incorporation documents usually include identification & address proof, registered office documents, nominee consent form, declaration, MOA and AOA and other relevant documents.
7. File SPICe+ forms: The application for incorporation of the entity is submitted via the MCA website together with other connected forms and relevant documents.
8. ROC scrutiny: The ROC scrutinises the application, asks questions and makes changes.
9. Certificate of Incorporation: Upon approval, the ROC issues the Certificate of Incorporation, confirming the OPC as a distinct legal entity.
10. Post-incorporation compliances: After the completion of incorporation, the OPC needs to take all necessary registrations like PAN, TAN and GST registration, as required and comply with all statutory compliances.

Important note: The latest amendment allows NRIs who are citizens of India but not foreign nationals to form an OPC.

Consequences of Non-Compliance

1. Invalid or delayed incorporation: Failing to satisfy the eligibility criteria, paperwork, or filing deadlines could lead to the rejection, resubmission, or delay of the incorporation of the firm. The NRIs should fulfil the necessary OPC criteria as mentioned under the Companies Act and Rules.
2. Statutory default penalties: Upon incorporation, an OPC needs to complete all the mandatory yearly filings and other requirements. Not completing an annual return could result in a fine of ₹10,000 with an additional ₹100 per day.
3. Compliance fines: Late MCA filings could lead to additional fees and penalties, thereby increasing the operational cost of the business.
4. Implications for directors: If the required director-related filings, disclosures, or KYC requirements are not fulfilled, there would be penalties, extra fees, and DIN-related penalties in some cases.
5. Regulatory penalties: Any violation that does not have a specific penalty could lead to a fine of ₹10,000 + ₹1,000 per day as per the limitations imposed under Section 450.

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Conclusion

An OPC is one way NRIs who are citizens of India can have an alternative route to establish themselves in business in India while having limited liability. However, correct incorporation and ongoing compliance are necessary. KANAKKUPILLAI is your answer for assistance in OPC incorporation and compliance with the MCA.

Frequently Asked Questions

1. Can an NRI incorporate an OPC in India?

Yes. An NRI who is a citizen of India can incorporate an OPC in India. According to the Companies (Incorporation) Rules, Indian nationals, regardless of whether they live in India or not, are allowed to incorporate an OPC, provided they meet the relevant criteria.

2. Do NRIs have to be physically present in India?

No. An NRI can go about the process of incorporation by way of representation, subject to the requisite documentation. Documents executed abroad can be notarised, apostilled, or consularized based on the situation.

3. Who can be the nominee for the OPC owned by an NRI?

The OPC has to have a nominee that satisfies the relevant qualifying criteria. The nominee will have to provide necessary consent and supporting documents. In the case of death or disability of the sole member, the nominee is entitled to be a member of the OPC.

4. Does the NRI have to fulfil any residential criteria in order to form an OPC?

No. Since the Companies (Incorporation) Second Amendment Rules, 2021, an Indian citizen can incorporate an OPC regardless of how many days they’ve spent in India; the rule explicitly applies ‘whether resident in India or otherwise.’ The 120-day figure defines the term ‘resident in India’ for other purposes in company law; it is not a stay requirement for OPC eligibility.

5. Do OPCs owned by NRIs need any special compliances?

Yes. Apart from normal compliances applicable to OPCs and the MCA, it may be necessary to follow FEMA, foreign exchange, tax, and industry-specific compliances based on its ownership, business operations, and transactions. Proper legal advice is important in this regard.