Wednesday, March 19, 2008

How Indian bureaucracy slows down investments by NRIs

A friend of mine has just decided to make an investment in India, which will result in his becoming a Director of this (at present, rather tiny) company.

In order to actually achieve this, however, apparently he has to take the following steps:

1) A colour photocopy of his passport needs to be made.

2) This should be taken to the Indian Embassy for affixing the signature and seal of the concerned officials (even in a small country such as Switzerland, this can take up a whole day or even more if one includes waiting time at the Embassy)

3) The photocopy then needs to be notarized by a local solicitor.

4) This document should then be couriered to the Expat Office in Bangalore where it would be used to apply for his Director Identification Number (DIN).

5) On applying, an application form would be generated and this would be couriered back to him.

6) On receiving this application form by courier you would need to sign at pre-designated places on the form and courier the form back to us at the Bangalore Office.

7) This form would then be submitted to the Registrar of Companies and his DIN would be allotted (on payment of the necessary fees).

In most countries, it would be either step 2 or step 3 (asking for step 3 after step 2 is tantamount to saying that the Indian government does not trust its own Embassies!). Here a simple change, asking for items 2 OR 3, instead of both 2 AND 3, would make life easier for investors.

Sequencing items 5-7 AFTER items 1-4 simply slows down the process. If the form (item 6) were issued at the start of the process, then the whole caboodle would be shortened. That would be a very useful second change in the procedure.

So two simple changes would make life simpler and easier for NRI investors and not change anything in terms of the information required by the government. Sphere: Related Content

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