Setting Up Business in India: Can Foreigners Choose a One Person Company?

India is rapidly emerging as one of the world’s most attractive destinations for foreign investment. The ease of doing business, its fast-growing economy, and a huge consumer market have made it easier than ever to launch and scale ventures in the country.

With multiple business entity options available for entrepreneurs planning to set up a company in India, it’s crucial to know what’s legally permissible – and what isn’t. Among the different structures, the One Person Company (OPC) has become a very popular choice globally because it allows a sole founder to run a company with limited liability and minimal compliance. But in India, the rules are different.

Can a Foreign National Register a One Person Company in India?

Short answer: No. 

Under India’s Companies Act and related rules, only an Indian citizen who is also a resident in India can form an OPC. This means foreign nationals—and even Non-Resident Indians (NRIs) who aren’t Indian citizens—are not eligible to register this entity. The law also requires that the nominee of an OPC must be an Indian citizen and resident, further restricting foreign participation.

This restriction exists because OPCs have simpler compliance and reporting requirements, which the government prefers to allow only under tighter control of ownership and foreign investment.

So What Can Foreigners Do Instead?

Although OPC registration is off the table, foreign entrepreneurs have several robust alternatives in India:

• Private Limited Company – The most popular choice. Foreign nationals can own 100% equity in most sectors under the automatic FDI route, though they’ll need at least two shareholders and two directors (including one Indian resident director).
  
• Public Limited Company – Suitable for larger enterprises looking to issue shares publicly.
  
• Limited Liability Partnership (LLP) – Combines partnership flexibility with limited liability; allowed with FDI in specific sectors.
  
• Liaison, Branch, or Project Office – Excellent for foreign companies exploring the market or executing specific projects without full incorporation. 

While foreign nationals cannot register a One Person Company in India due to nationality and regulatory restrictions, India remains a highly valuable market with multiple business structures available for foreign entrepreneurs. 

To receive expert, insider guidance on choosing the most suitable entity structure for your business in India, get in touch with us today.