Typical Problems Faced By NRIs While Starting A Business In India?
In the last 70 years, Indians have migrated in almost all leading countries of the world in search of jobs, education, better life, etc. In all these years, they toiled a lot and become prosper up to a great extent. Now, Indians are operating several small and big companies in foreign countries and providing job opportunities to locals. For example- the CEO of Google, the most popular search engine of the world, is an Indian (Sundar Pichai). As India’s economy is booming by leaps and bounds, many NRIs business tycoons explore opportunities to invest their hard-earned money In India, set up business ventures, provide jobs to fellow Indians, and get a handsome profit out of it.
But, for NRIs, setting up companies is not an easy task. There are many problems that discourage them from investing money in India. A few problems are mentioned here below. Just cast a look at them- 1. Excessive Bureaucracy Bureaucracy is a system in which chosen officers follow rigid rules and regulations (as dictated by the government) and give their nod to various projects related to different fields, such as business, construction, administrative decisions, etc. India is notorious for excessive bureaucracy. When NRIs start the official procedure of launching their businesses in India, self-serving bureaucrats delay their projects and don’t give the required approval easily. They tend to move NRIs from one department to another in the name of different formalities. It creates stampedes the creativity of NRIs, and they abandon their idea of doing business in India. 2. Large scale Corruption Corruption is rampant in many government departments in India. It is a mind-blowing challenge for NRIs who want to do business in India. It is also rampant in the private sector, making it difficult for new business organizations to set their business organization in India. For example- Many Indians banks don’t release funds even though they approve the loan application. There are some corrupt officers in banks who raise an unwarranted objection to halt the release of funds. They agree to give the approved funds when they are offered the hush-money or bribe. Also, there are rival companies that pay money to corrupt officers so that NRIs can’t open up their business that could threaten their monopoly in the business. 3. No Clear Rights To NRIs In India, there is no clarity on the legal rights of NRIs. For example- if NRIs try to buy home/office for the launch of their business organizations, locals cheat them by selling farmland and agricultural land unlawfully. To solve this problem, NRI investors must deal with certified real estate brokers only in consultation with any Startup Lawyers in India. This will help NRIs to deal with the rules of the Foreign Exchange Management Act (FEMA). Always keep in mind that NRIs can invest only in residential and commercial properties. They can’t invest in agricultural land in any way. 4. Forceful Land Grabbing Problem Forceful and illegal land grabbing is another problem faced by NRIs in India. In most of the cases, the land grabber and person taking illegal possession of the land of NRIs are known to the buyer. So, to avoid this hassle NRIs must engage in land dealings in consultation with the real estate broker, local family members or a reputed Law firm in India. 5. Concern About Dubious Developers Several NRIs suffer a lot owing to their investment in inappropriate projects and real estate developers who don’t complete their projects on time. Now, NRIs can easily check the record of real estate developers with the help of the state RERA website. They can also use social media and the Internet, seek the feedback of previous home buyers and take decisions accordingly. 6. Requirement Of Indian Residents Companies Act, 2013 allow NRIs, foreign nationals, and PIOs to act as directors in an Indian company. However, this creates a lot of problems for many individuals as they must Indian nationals. However, there are many Indian companies that help NRIs to find willing persons as directors in exchange for a fixed remuneration. Even Corporate Law firms in India can help them find such persons through referrals and other relevant sources. 7. The Problem Of Notarization Of Documents From Indian Embassy
To set up a company, NRIs need to get the Digital Signature Certificates (DSCs) of the proposed directors and then apply for Directors’ Identification Number (DIN) by attaching the ID and address proofs of proposed directors. Generally, NRIs live outside India, and they have no local address. In this case, NRIs have to present the documents before the Indian embassy of the country they are living in for notarization. This takes a lot of time and increases the cost of setting up a company in India. Final Words: These are some main problems faced by NRIs in India when they come here with a business point of view. However, the best law firms in India can help them to get rid of all these issues easily and start their business activities in this country.