S2NRI

Non-Resident Indians (NRIs) temporarily shift abroad. But, their belongings are left behind in the very place where they leave from. They still hold their ownership, but challenges turn more than ever. The most precious fixed asset is the property that requires proper monitoring.

Certainly, it’s not easily to defeat challenges from afar. One thing can help in making it easier. It’s POA or the Power of Attorney.  This legal document allows entrusting the power of taking care of the property to trusted individuals in India. With it, the POA holder can make decisions on behalf of NRIs for various property-related matters. These matters can be related to monitoring, maintenance, and decision-making.

This blog will help you explore how non-residents can leverage the Power of Attorney. It ensures effectively overseeing their properties while being overseas.

Now that you know the power of a Power of Attorney, let’s start with understanding and what to do for entrusting it so that your property can remain safe and secure.

• Understanding Power of Attorney

It’s a legitimate document that permits authority to recognize another person to act on behalf of the non-resident. There are some specifications in terms of matters or transactions for using it.  For granting it to someone, they need a trustworthy family member, friend, or child etc. Even, you can hire a property management consultant can make it easier. So, you can go for it.

• Attorney-in-Fact

An attorney-in-fact is crucial if you want efficient monitoring of your property. This authority should deem the competent person possessing integrity, familiarity with property concerns, and the ability to handle financial responsibilities. To choose, you have family members, close friends, or professionals such as lawyers or property consultants that can be considered as an attorney-in-fact.

• Defining Powers and Scope in POA Doc

NRIs must be precise when it comes to defining the powers and scope of the Power Of Attorney (POA). Consult with the property management consultant or services providers. It will help in drafting protocols that can help in properly monitoring NRI properties. This should be done upon inspecting property, rent collection, payment of bills, maintenance, and handling legal matters. Once discovered & understood every detail, create a blueprint of specific guidelines to avoid any ambiguity or misuse of authority.

• Registering the Power of Attorney

However, it’s not necessary to register or draft a POA. For a safety purpose, it’s recommended to register it. With it, you can authenticate and legally validate who is going to act on your behalf and how. Additionally, it is a rigorous security measure that is accepted by authorities, banks, and other stakeholders.

For POA registration, the NRI should visit the Sub-Registrar’s office in the jurisdiction where the property is located.

• Monitoring Property Finances

The attorney-in-fact is key in managing property finances. These can be associated with rental income, tracking expenses, timely payment of property taxes, utility bills, and insurance premiums. The selected individual or the attorney-in-fact will be able to maintain financial records. Later, he or share can update NRIs with regular reports. This practice encourages transparency and financial control.

• Communication and Regular Updates

Communication should be effective enough between NRIs and their attorney-in-fact. This is the best way to monitor property like a pro. It can happen if there is a proper plan for interacting on regular intervals. Once scheduled, the attorney-in-fact can easily update the status of the property, bills, or financial matters, and some other significant things. Many effective tools are there to bridge the gap and exchange information without any hassles. These can be emails, video calls, and messaging applications.

• Handling Maintenance and Repairs

For keeping the property lively and maintained, the attorney-in-fact can coordinate with NRIs using phones or emails. The things, such as which trusted consultants or service providers should be hired, how to oversee repairs, quality workmanship, and approvals on associated expenses, can be closed quickly. Moreover, he/ she can regulate property inspections to determine if there is any need for maintenance, and if yes, how to address them promptly.

• Legal and Compliance Matters

The attorney-in-fact can help NRIs to legally comply with the compliance pertaining to property. This may include dealing with tenants, resolving disputes, renewing leases, or complying with local government enforced laws and regulations. Having a legally authorized representative (i.e. POA) can help in making hasty decisions and legally proceed with any property-based matter.

In 2022, RCI registered an overwhelming growth in inward gross remittances, which surpassed an all-time high of $107.5 billion. It’s a positive sign for non-residents who are likely to start a business here.
Starting a business in India as a non-resident involves certain procedures and considerations.

Step By Step Guide to Start a Business by NRIs

Here are the general steps to guide you through the process:

1. Determine the Business Structure

Decide on the type of business entity you wish to establish, such as a Private Limited Company, Limited Liability Partnership (LLP), or a Branch Office.

• Private Limited Company: Owning a Private Limited Company offers limited liability protection and allows for the infusion of foreign capital. It is a popular choice for businesses with growth potential.
• Limited Liability Partnership (LLP): Opting in an LLP means enjoying the combined benefits of a partnership and a company. It offers limited liability to partners and is suitable for small and medium-sized businesses.
• Branch Office: NRIs are allowed to set up a branch office here as an extension of their existing foreign company. This is the case of already established business. It allows them to conduct specific activities as permitted by the Reserve Bank of India (RBI).
• Liaison Office: A liaison office acts as a communication channel between the NRI’s parent company and potential customers in India. It cannot undertake any commercial activities and is primarily focused on market research and promotion.
• Project Office: NRIs undertaking specific projects in India can establish an office during the tenure of the project. But for this, an approval from the RBI is needed, and is often dissolved after project completion.
• Sole Proprietorship: Indian emigrants can also operate as sole proprietors, where they are personally liable for the business. However, this form of business does not offer limited liability protection.
• Partnership Firm: Non-residents can enter into partnerships with Indian residents or other NRIs to start a partnership firm. It is governed by the Indian Partnership Act, 1932.

Here, the point to consider is that the selection of business structure depends on factors. These can be associated with the nature of the business, desired level of control, liability protection, and regulatory requirements. Non-residents should consider consulting with legal and business professionals to understand the specific requirements and implications associated with each business type.

Another obstacle can be compliance with FEMA. They should comply with the Foreign Exchange Management Act (FEMA) guidelines and seek necessary approvals from the RBI or other regulatory authorities when establishing and operating businesses in India.

2. Obtain a Digital Signature Certificate (DSC)

A DSC is required for online filing and registration purposes. After the pandemic, Indian government has shifted its MCA facilities online. You can obtain it from certifying authorities in India.

3. Procure a Director Identification Number (DIN)

If you (NRI) are planning to set up a Private Limited Company, you must apply for a DIN from the Ministry of Corporate Affairs (MCA).

4. Choose a Business Name

This is a next step wherein you need to select a unique name for your business entity and ensure its availability for registration.

5. Register with the Registrar of Companies (RoC)

In order to get the certificate of incorporation, you need to file the necessary documents, including the Memorandum of Association (MoA) and Articles of Association (AoA). With this, the registration of your business entity with the RoC is initiated.

6. Acquire a Permanent Account Number (PAN)

A PAN is a must-have if you do any transactions here. So, you should apply for a PAN with the Income Tax Department to fulfil tax obligations.

7. Open a Bank Account

Now that you are likely to commence your own business, it’s necessary to open an Indian bank account (NRE Or NRO) in the name of your business entity.

8. Apply for Necessary Business Licenses

Depending on the nature of your business, you may need specific licences and permits from relevant authorities. Consult with an experienced consultant to discover what licences to have.

9. Comply with Tax Regulations

Understand and comply with the tax obligations applicable to your business, including Goods and Services Tax (GST), if applicable.

10. Consider Foreign Exchange and FEMA Regulations

Familiarize yourself with the Foreign Exchange Management Act (FEMA) guidelines for capital investment, repatriation, and other foreign exchange-related matters.

11. Hire Professionals

Engage legal, accounting, and tax professionals to ensure compliance with Indian laws and regulations.

It is important to note that specific requirements and procedures may vary based on the business structure, sector, and location within India. It is advisable to consult with professionals or company registration consultants with expertise in Indian business laws to navigate the process smoothly.