For foreign companies planning to set up operations in India, appointing a Resident Director (RD) is a legal necessity under the Companies Act, 2013. As per Section 149(3) of the Act, at least one director on the board must be an Indian resident, i.e., a person who has stayed in India for a minimum of 182 days in the previous calendar year.
Finding the right individual to act as a Resident Director is crucial for compliance, reputation management, and business continuity. This article offers a step-by-step guide to identify, evaluate, and appoint a suitable Resident Director in India.
Before starting the search, it's essential to understand what the Resident Director's role entails:
Ensuring statutory compliance under Indian corporate laws
Acting as a local point of contact for Indian authorities
Signing authority for various statutory filings
Representing the company in government interactions
Helping in opening bank accounts, registration, tax filings
Cooperating in audit procedures and inspections
A Resident Director is not necessarily involved in daily operations but is responsible for ensuring that the company complies with local laws.
To be appointed as a Resident Director in India, a person must:
Be a natural person (not a corporate entity)
Be a resident in India (182 days or more in the preceding calendar year)
Not be disqualified under Sections 164 and 165 of the Companies Act
Have a valid Director Identification Number (DIN)
Possess PAN and Aadhaar (if Indian citizen) or valid visa/residence permit (if foreign national residing in India)
Reach out to chartered accountants, company secretaries, and legal firms that provide directorship services
Use professional platforms like LinkedIn to search for experienced directors
Many service firms specialize in providing Resident Directors on a nominee or compliance-only basis. Some well-known firms in India include:
| Service Provider | City | Website |
|---|---|---|
| TAXAJ | Pan India | www.taxaj.com |
| IndiaFilings | Pan India | www.indiafilings.com |
| Vakilsearch | Pan India | www.vakilsearch.com |
| StartUp CA | Bengaluru | www.taxaj.com/nammabengaluru |
If the company has senior management or trusted associates who qualify under residency norms, they may be appointed as Resident Directors.
| Attribute | Description |
| Legal Awareness | Should understand Indian corporate and tax laws |
| Trustworthiness | Often handles sensitive company documentation |
| Availability | Must be accessible for urgent signatures or government liaison |
| Professionalism | Represents the foreign company in local engagements |
| Experience | Preferably has served on boards or in corporate roles before |
To formally appoint a Resident Director, the following documents are generally required:
PAN Card & Aadhaar Card (for Indian citizens)
Passport and Visa (for foreign nationals residing in India)
Director Identification Number (DIN)
Consent to act as Director (Form DIR-2)
Declaration of non-disqualification (Form DIR-8)
Proof of residency (utility bills, rent agreement, etc.)
Identify Candidate: Choose the suitable person based on legal and professional criteria
Due Diligence: Conduct background and KYC checks
Obtain DIN: Apply through MCA portal if not already available
Consent & Declaration: Get DIR-2 and DIR-8 signed
Board Resolution: Pass a resolution in the company board meeting
MCA Filing: File DIR-12 with the Ministry of Corporate Affairs
Non-compliance penalties
Fraud or misrepresentation risks
Legal liability in case of government issues
Damage to reputation if the RD acts unethically
Always ensure due diligence and preferably use reputed firms for RD services.
| Type of Engagement | Approximate Cost (INR/year) |
| Compliance-only RD | 50,000 - 1,50,000 |
| Professional/Experienced RD | 2,00,000 - 5,00,000 |
| Full-time Executive RD | 10,00,000 and above (depending on role) |
Note: Costs may vary by city, firm, and complexity of operations.
Lack of clear documentation
No background verification
Overpromising service firms
Lack of clarity on roles and responsibilities
| Factor | Importance Weightage |
| Legal Compliance | 30% |
| Trust & Ethics | 25% |
| Availability | 15% |
| Cost | 10% |
| Experience & Skills | 20% |
Increased demand for compliance-only directorships
Use of AI-driven KYC checks in selecting RDs
Enhanced scrutiny under FEMA and FDI laws
Preference for professionals with multi-disciplinary skills
Finding a suitable Resident Director in India is not merely a compliance checkbox but a strategic decision that can significantly affect your company's local standing, operations, and legal credibility. Whether appointing an internal associate or using a professional service, conduct thorough due diligence and choose someone who aligns with your company’s values and compliance needs.