Business Setup

Annual Compliance for NRI-Owned Companies in India

Annual Compliance for NRI-Owned Companies in India

Running an Indian company from overseas is not impossible, but it is quite complex. Indian compliance does not pause because the director is in the UK, Canada, the USA, or Australia. Deadline works as per Indian time; penalties accrue in INR. One missed tax filing, and you face consequences that are both time-consuming and expensive to reverse from abroad.

Want to avoid it and looking for assistance? This blog provides you with complete information on annual compliance for NRI-owned companies in India for FY 2026-27. It covers every form, deadline, and penalty that matters for NRI directors, shareholders, and promoters. So read on and gather all the information.

Key Takeaways
  • The annual compliance should be fulfilled on a yearly or annual basis for NRI-owned companies.
  • NRI-specific compliance obligations include annual FLA return, Form FC-GPR, Form FC-TRS, Form 15CA/ 15CB, resident director requirement, and section 195 TDS compliance.
  • Event-based compliance is another type of compliance for NRI-owned companies in India. As its name suggests, when doing certain activities such as allotting new shares, one should comply with such regulations.
  • Under FEMA regulations, NRI-owned companies need to report their foreign transactions and investments to the RBI.
  • Most vital takeaways include mandatory annual filings, strict reporting of foreign funds, and ongoing director requirements.

The Compliance Landscape for NRI-Owned Companies

An Indian Private Limited Company or LLP directed or owned by an NRI is treated the same as any Indian company from a compliance perspective. However, they face one crucial addition, i.e., Reserve Bank of India (RBI)/ Foreign Exchange Management Act (FEMA). This extra layer includes annual Foreign Liabilities and Assets (FLA) returns, Form 15CA/CB for every repatriation, and FC-GPR filings for every capital infusion.

Additionally, they juggle compliance across five separate regulatory frameworks, i.e., the Ministry of Corporate Affairs (MCA), RBI, the GST Council, the Income Tax Department, and state labour authorities.

Further, let's know about specific obligations faced by NRI-owned companies:

  • Annual FLA Return (RBI): It is mandatory for every Indian company with foreign direct investment (FDI). The due date for it is July 15.
  • Form FC-GPR: This form should be filled out within 30 days of every fresh share allotment to a foreign investor, including an NRI parent/ shareholder.
  • Form FC-TRS: This form should be filled out within 60 days of any transfer of shares between resident and NRI parties.
  • Form 15CA/ 15CB: These are required before every remittance of fees, dividends, or repatriation of capital to the NRI living overseas.
  • Resident Director Requirement: There should be at least one resident director (stayed in India for 182 or more days in the preceding calendar year).
  • Section 195 TDS Compliance: All payments made to NRI, including salary, dividends, royalties, sitting fees, or more from the Indian company, require TDS deduction under Section 195 and Form 27Q filing.

This was all about the compliance landscape for NRI-owned companies. Moving ahead, let's know about MCA/ ROC compliance requirements for NRI-owned companies.

MCA/ROC Compliance- Annual and Event-Based Tax Filings

For NRI-owned companies, annual compliance would mostly include some mandatory filings and disclosures. These are legal tax obligations and should be completed within the set deadlines.

Annual ROC Filings (Private Limited Company)

The table below showcases annual ROC filings for private limited companies owned by NRIs:

Form Purposes Due Date (FY 2026-27) Late Fee
Form INC-20A This form confirms that all subscribers have paid their subscribed shares. It is only filed once during company incorporation. Within 180 days of incorporation, the director of the company should fill out this certificate of business commencement with the Registrar of Companies (ROC). INR 50,000 for the company and INR 1000/ day per officer. Without it, no company operations are allowed.
DIR-3 KYC It is a mandatory regulatory filing for all persons in India holding a Director Identification Number (DIN). Needs to be filed only once every three years. Web-based if there is no change in the details (5 min OTP process); e-form if changes in the details (requires CA + DSC certification) September 30 annually DIN deactivated October 1: INR 5,000 reactivation fee. Until restored, all filings get blocked.
AGM An Annual General Meeting (AGM) is a yearly gathering of shareholders and the board of directors of a company. This meeting is held to review financial performance, approve dividends, elect board members, and appoint auditors. First AGM: within 9 months of the end of the first financial year. September 30, 2026 (with ROC approval, you can extend the timeline by three months). INR 1,00,000 for the company + INR 5,000 per officer for failure to hold AGM.
ADT-1 Auditor appointment/ reappointment intimation to ROC. First auditor: should be done within 30 days of company incorporation, and annual reappointment can be done within 15 days of AGM. Within 15 days of AGM, i.e., by October 15. INR 200 - INR 500/Day
AOC-4 It is a mandatory e-form required by the MCA in India. Under section 137 of the Companies Act, 2013, companies need to file their annual financial statements, auditor's reports, and directors' reports with the ROC. Within 30 days of AGM (October 30, 2026) INR 100/Day (no cap); under section 137, company and officer pay penalty.
MGT-7 It is an annual return filed with the ROC. It contains the details of directorship, shareholding, governance, and indebtedness of a company during the year. Within 60 days of AGM (November 29, 2026) INR 100/Day (no cap); non-filing for three consecutive triggers section 164(2) director disqualification.
DPT-3 It is a mandatory annual return that companies need to file with the MCA. It ensures financial transparency by stating all outstanding borrowings, including inter-corporate deposits, loans from directors, and more. Even nil should be filed by all companies. June 30, 2026 INR 100/Day; severe penalty for actual deposit compliance failures (up to INR 10 crore).
MSME-1 Half-yearly return on outstanding payments to MSME suppliers more than 45 days. It applies to companies that purchase from MSMEs. April 30 (October-March period) and October 31 (April and September period). INR 25,000 - INR 3,00,000 per default.

Event-Based MCA Filings (File within the Deadline After the Event)

The table below represents event-based MCA filings for NRI-owned companies:

Form Trigger Event Deadline
DIR-12 Resignation or appointment of a director. Within 1 month of the event.
PAS-3 New share allotment, including NRI parent/ investor. Within 30 days of allotment.
SH-7 Increase in authorised share capital. Within 1 month of the special resolution.
INC-22 Registered office address change. Within 30 days of the address change.
SH-4 Share transfer between parties. Within 60 days of transfer.
MBP-1 Director disclosure of interests in contracts (annually at the first board meeting of each financial year) First board meeting of each financial year.
CHG-1 Modification or creation of a charge. For instance, the company takes a loan. Within 30 days of creation.

These are some of the ROC/ MCA annual compliance for NRI-owned companies. Moving further, let's know about the RBI/ FEMA compliance for NRI-owned companies.

RBI/ FEMA Compliance- NRI-Specific Obligations

For NRI-owned companies, RBI and FEMA compliance is vital. Considering this, any Indian company with FDI, including fully NRI-owned entities, needs to follow FEMA reporting rules set by the RBI. The FEMA requirements are different from the MCA filings stated above. Hence, both need to be fulfilled.

Form/ Requirement Description Due Date Filed With
FLA Return (Foreign Liabilities and Assets) It is mandatory for every company that holds FDI or has made an overseas investment. It includes annual return reporting of all foreign investment in the company, i.e., FDI, equity, debt, FPI, and any overseas asset, even if there are no new transactions made during the year. It is filed on the FLAIR portal of the RBI. July 15 annually RBI (FLAIR portal)
Form FC-GPR Report every instance of fresh capital invested by a foreign investor/ NRI. Through the AD Category-I bank via the RBI FIRM portal, filed by the Indian company. It is needed even for small capital infusions. Within 30 days of share allotment. RBI via AD Bank (FIRMS portal)
Form FC-TRS Report every share transfer between a resident Indian and an NRI, including an NRI buying/ selling shares in the Indian company. This form is filed by the resident party. Within 60 days of the transfer of shares. RBI via AD Bank
Form 15CA and 15CB Form 15CA (self-declaration) and Form 15CB (CA certificate) are needed before every repatriation from India to the NRI- director fees, dividends, royalties, and loan repayments. Without these, SWIFT is not processed by banks. Before each remittance Income Tax Portal (Form 15CA) + CA (Form 15CB).
Annual Performance Report (APR) for ODI If an Indian company has made overseas direct investments (ODI) in any foreign JV or subsidiary, it is vital to file the APR by December 31. December 31 annually RBI via AD Bank
Resident Director Verification Annually verify that at least one director should be an Indian resident (stayed for 182 or more days during the preceding calendar year). If the current resident director does not qualify under this, a company needs to appoint a new one and file DIR-12 within 30 days. Verify by April 30 each year. Internal check + MCA portal

These are the RBI/ FEMA annual compliance for NRI-owned companies in India. Moving forward, let's discuss income tax compliance for NRI company owners in India.

Income Tax Compliance for NRI-Owned Companies

The table below denotes the annual income tax compliance for NRI-owned companies in India:

Obligation Details Due Date Late/ Non-Filing Impact
Statutor Audit Regardless of the size, all companies need to file their annual accounts audited by an ICAI-registered CA. The auditor report forms are part of the AOC-4 filing. Before AGM (by September 30) Without an audit, you cannot file AOC-4.
Income Tax Return- Form ITR-6 Other than those companies claiming tax exemptions available under section 11, ITR-6 is a mandatory tax return for all companies. It is filed electronically with a digital signature and includes a balance sheet, profit & loss statement, and a tax audit report (Form 3CD), if applicable. October 31, 2026 (for companies with tax audit) Late fee INR 10,000 (under section 234F); 1% interest charged per month on unpaid tax (section 234A).
Tax Audit- Form 3CA/3CB + 3CD A tax audit is mandatory if gross sales/turnover exceeds INR 1 crore (INR 10 crore if digital transactions ≥95%). The tax audit report is prepared and certified by a CA. September 30, 2026 0.5% of turnover or INR 1,05,000, whichever is less (section 271B).
Transfer Pricing Study + Form 3CEB It is mandatory for all companies with "cross-border transactions." It also includes transactions with NRI shareholder/ parent) exceeding INR 1 crore. Additionally, it requires a TP study certified by a CA on Form 3CEB. October 31, 2026 2% of transaction value (Section 271G) for non-compliance.
TDS monthly deduction and deposit TDS is deducted from salary (192), professional fees (194J), dividends (195 for NRI shareholders), and any other payments that trigger TDS. 7th of every month Interest 1.5%/month; penalty equal to TDS; 100% business expense disallowance (under section 40).
TDS Returns - Quarterly (26Q/27Q) Form 26Q (resident payments) and Form 27Q (NRI payments, including payments made to the NRI parent) should be quarterly filed with TRACES/ NSDL. Additionally, Form 27Q is particularly vital for NRI-owned companies making payments to the NRI promoter.
  • Q1: July 31
  • Q2: October 31
  • Q3: January 31
  • Q4: May 31
 Under section 234E, INR 200/day late fee; maximum = TDS amount
Advance Tax If the estimated annual tax obligation is more than INR 10,000, you need to pay advance tax in four installments. Companies: 15% by June; 45% by September 15; 75% by December 15; 100% by March 15.
  • Q1: June 15
  • Q2: September 15
  • Q3: December 15
  • Q4: March 15
 Under sections 234B and 234C, interest 1%/ month charged

This was all about income tax annual compliance for NRI-owned companies. Now, moving ahead, let's know GST annual compliance for NRI-owned companies.

GST Compliance

The table below showcases the GST annual compliance for NRI-owned companies in India:

Return/ Form Frequency Due Date Penalty for Late Filing
GSTR-1 (Outward Supplies) Monthly, if turnover is more than INR 5 crore or quarterly with IFF 11th of the following month (monthly); 13th of the month after the quarter (quarterly) INR 50/day (INR 20/day for nil); capped at INR 10,000 per return.
GSTR-3B (Summary return + tax payment) Monthly or quarterly (QRMP scheme for up to 5 crore turnover) 20th of the following month (monthly); 22nd/ 24th of the month after quarter (quarterly). INR 50/day (INR 20/day for nil) + 18% interest on unpaid tax
GSTR-9 (Annual Return) Annual December 31, 2026 (for FY 2025-26) INR 200/day; maximum 0.25% of turnover.
GSTR-9C (Reconciliation Statement) Annual- for taxpayers with turnover of more than INR 5 crore December 31, 2026 (for FY 2025-26) Same as GSTR-9
GSTR-5 (for NRTP) Monthly, if an NRI directly makes taxable supplies under NRTP registration. 13th of the following month; even nil retuns mandatory INR 200/day; 18% interest on unpaid GST
E-invoicing Compliance Ongoing- for B2B transactions if turnover is more than INR 5 crore All B2B invoices are due on the 7th of the following month of when issued. INR 25,000 per invoice penalty for non-generation.

Moving further, let's know about the other director-level obligations that NRI-owned companies need to follow in India. 

Director-Level Obligations: KYC, DIN, and DSC

Apart from annual compliance, NRI directors also need to maintain personal compliance with DIN-related obligations from overseas. Here is what they need to consider:

  • DIR-3 KYC by September 30: While historically it was annual compliance, now MCA has shifted it to a triennial, i.e., once every three years, filing system for company directors who already submitted their KYC. Use web-based KYC (OTP verification) if there are no changes. Considering this, file e-Form DIR-3 KYC if there are changes in address, email, or mobile, and submit DSC + CA certification.
  • Digital Signature Certificate (DSC) Renewal: These are generally valid for 1-2 years. NRI directors using their passports as identity proof should renew their DSCs. The renewal process takes 5-7 working days.
  • Quarterly Verify DIN Status: You can do so by logging in to the mca.gov.in website → MCA Services → Check DIN/DPIN status. Instead of "Approved," if you get any other status, i.e., "Disqualified" or "Deactivated," you need to take immediate action.
  • Annual Board Meeting Participation: According to the Companies Act, 2013, you need to schedule 4 board meetings per year with no gap exceeding 120 days between them. If not able to present physically in India, NRI directors can participate in the meeting via video conference.
  • MBP-1 Disclosure at the First Board Meeting Each Year: Using Form MBP-1, every director should disclose their interest in other companies, body corporates, and firms at the first board meeting of each financial year.
  • Maintain Current Contact Details on MCA Portal: You receive all ROC notices, OTPs, and compliance reminders on your DIN-linked mobile number and email. So ensure that your contact numbers are updated with MCA records.

These are some of the director-level obligations that NRIs need to follow along with annual compliance in India.

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Final Thoughts

Lastly, annual compliance for NRI-owned companies in India is vital for both legal standing and operational success. Considering this, to ensure smooth business operations, from initial incorporation to ongoing compliance obligations, these requirements should be fulfilled.

Furthermore, depending on industry specifics and business nature, as regulations may vary, taking legal and financial assistance is advisable to remain up-to-date and ensure complete compliance. We at Savetaxs have a team of Chartered Accountants with years of experience in handling compliance and advisory needs of NRI-owned companies in India. If you need any assistance, please feel free to contact us.

Glossary
  • Foreign Exchange Management Act: FEMA, an Act to Manage and Simplify the Foreign Transactions, Remittances, Investments, Etc.
  • Income Tax: Income Tax, a Type of Direct Tax, is Imposed by the Government on the Income of Individuals or Organisations.
  • Digital Signature Certificate: Digital Signature Certificate, an Online Version of a Signature, Used as Identity Proof and to Verify Itr.
  • Document Identification Number: DIN, a Unique Code Assigned to the Documents by Itd, Enhances Security and Efficiency in the Departments of Income Tax.
  • Input Service Distributor: A Complete Guide to Input Service Distributor Covering Its Meaning, Registration, and GST Credit Distribution Rules
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Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.

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Frequently Asked Questions

An NRI-owned company is an Indian company where one or more directors/ shareholders are NRIs or foreign entities. Just like an Indian company, it should comply with the Companies Act, 2013,  ROC/MCA filing, along with additional FEMA/ RBI rules.

Yes, RBI reporting is mandatory even when the investor is an NRI if it has a foreign inflow. Additionally, non-compliance with it can result in facing FEMA penalties. 

Core ROC annual filings for NRI-owned company include AOC-4 (financial statements), MGT-7 (annual return), ADT-1 (auditor appointment where applicable), DIR-3 KYC for directors, and other even-based forms. 

Yes, foreign shareholders generally need a PAN card for taxable transactions such as receiving taxable income, the sale of shares, and claiming DTAA benefits in India. 

Yes, under section 149(3) of the Companies Act, 2013, every Indian company should have at least one resident director who meets the statutory residency requirements, whether there are any NRI shareholders or not.