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Investment in Private Limited Companies

Looking to invest in India as a Non-Resident? With the right guidance, you can leverage FDI opportunities in high-growth sectors through private limited companies—compliantly, strategically, and tax-efficiently under FEMA and RBI regulations.

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India’s booming economy and liberalized FDI norms make it an attractive destination for non-resident investors. Whether you're an individual or a foreign entity, investing in Indian private limited companies offers access to emerging markets, government-backed sectors, and long-term returns. At Right Management Consultants, we assist you through every step—from regulatory compliance under FEMA and RBI to tax optimization and repatriation planning. With expert support on documentation, sector-specific rules, and DTAA benefits, your investment stays secure and future-ready

Investment in Private Limited Companies Support by Experts

We assist NRIs and foreign investors in structuring and executing compliant FDI into Indian private limited companies—from due diligence and RBI filings to tax planning and post-investment compliance.

FDI Structuring & Regulatory Advisory

RBI & FEMA Compliance

Incorporation & Legal Setup

Taxation & DTAA Planning

Ongoing Compliance & Reporting

Exit Strategy & Repatriation Advisory

Important Aspect of
Investment in Private Limited Companies

Regulatory Framework

- Foreign Direct Investment (FDI) in Indian partnership firms and proprietary concerns is permitted only with prior approval from the RBI.
- The investment must also comply with the provisions of the Foreign Exchange Management Act (FEMA).
- Such investments are evaluated by the RBI on a case-by-case basis, based on the nature of business, compliance standards, and sectoral guidelines.

Eligible Investors

- Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) can invest in proprietary concerns or partnership firms with RBI approval.
- Investment by **foreign nationals or entities** (non-NRIs) is generally not permitted unless special approval is obtained.

Approval Process

Investors must submit a formal application to the RBI through an Authorized Dealer Bank (typically the Indian bank handling the transaction).
- Detailed business information, sources of funds, nature of the business, and KYC documents are required.
- Approval is discretionary and depends on RBI’s evaluation of the business and investment proposal.

Sectoral Restrictions

- FDI in partnership/proprietary concerns is only considered in sectors **where 100% FDI is allowed under the automatic route** and **no FDI-linked performance conditions** apply (e.g., manufacturing, wholesale trade).
- Sectors with restrictions or conditions are not eligible for this route.

Tax Implications

- Income earned by non-residents through the firm or proprietary concern is subject to **income tax** in India.
- **Withholding tax** may apply to payments made to non-resident investors.
- DTAA benefits may be claimed to avoid double taxation in the investor's country of residence.

Compliance Requirements

RBI-approved investments must be reported appropriately and monitored through **Authorized Dealer Banks**.
- Annual compliance and financial reporting must be maintained as per **Indian tax laws** and **FEMA regulations**.
- The firm or proprietary concern must comply with **Income Tax** and **Goods and Services Tax (GST)** regulations in India.

Blogs and Articles

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About RMC

We are a team of experienced Chartered Accountants and compliance experts specializing in NRI taxation, remittances, repatriation, and business setup in India. With deep knowledge of FEMA, RBI regulations, and international tax treaties, we offer tailored, end-to-end solutions to help NRIs stay compliant and make confident financial decisions. From tax return filings to cross-border fund transfers and business advisory, we ensure clarity, accuracy, and timely execution—no matter where you are in the world.

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