India notifies concessions to its citizens living abroad
India has formally notified a major economic concession to its citizens living abroad, allowing them to set up one person companies (OPCs) in their home country. Until now, the facility was available only for those living in India.
The concession is expected to benefit a large number of Indians living in the Gulf, which has the highest number of non-resident Indians (NRIs). These Gulf-resident Indians will now be able to better plan their future for a day when their overseas work or contracts end and they have to leave their countries of limited residence to return home.
Guruprasad Mohapatra, Secretary of the Indian government’s Department for Promotion of Industry and Internal Trade, said in a media briefing to explain provisions of the Indian budget 2021-22 that the new budget "allows NRIs to incorporate OPCs in India."
He further said "the budget incentivizes the incorporation of OPCs by amending the Companies Incorporation Rules to allow OPCs to grow without any restrictions on paid up capital and turnover, allowing their conversion into any other type of company at any time, reducing the residency limit in India for NRIs to set up an OPC from 182 days to 120 days."
The complete budget was outlined to India’s parliament on 1st February by Finance Minister Nirmala Sitharaman, but their provisions such as the concessions to NRIs become effective on 1st April. Before they take effect such changes have to be notified as explained by Mohapatra.
He said an earlier restriction that OPCs set up by resident Indians cannot be converted into a into a public limited company or a private limited company for two years will not apply to NRIs. Similarly, a limitation that the paid-up capital of Indian rupees five million and annual turnover of rupees 20 million, presently applicable for OPCs has also been done away with. "So there are no restrictions on the growth of OPCs."