MCA issues General Circular No. 16/2014 Dated 10.06.2014 for Applicability of PAN requirement  for Foreign Nationals as Director of the Company at the time of Incorporation.

As per this circular, PAN is compulsory for a Foreign National who is a subscriber / promoter at the time of incorporation of the company. However, if the Foreign National does not possess a PAN, then he / she is required to furnish a declaration / undertaking in prescribed format as an attachment to Form INC – 7 at the time of incorporation of the company.

Further, a National Director of the proposed company shall be required to furnish the PAN details at the time of incorporation.

Prescribed Format is Produced hereunder for ready reference. The said undertaking / declaration is to be attached with Form INC – 7 at the time of incorporation of the new company.

Undertaking

I. . . . . . . . . . . . . (name) . . . . . . . . . . . . ., son of . . . . . . . . . . . . . (father’s name) . . . . . . . . . . . ., citizen of . . . . . . . . . . . . . (nationality) R/o (Address) . . . . . . . . . . . . . having passport No. . . . . . . . . . . . . . (passport Number) . . . . . . . . . . . . . hereby declare as under:

 (i)    That I am not required to obtain Income Tax Permanent Account Number (PAN) under the provisions of Income Tax Act, 1961;

(ii)   That in view of the above I have not been issued any PAN; and

(iii)  That I undertake to furnish to the Registrar of Companies (mention jurisdiction) details of my PAN as soon as a Permanent Account Number is allotted to me.

Date:
Place: (Signature)
Name of the Person

Our Analysis: This Clarification has come as a relief for foreign nationals / foreign promoters. The Ministry has relaxed the norms for applicability of PAN to foreign nationals / foreign promoters. By giving the above declaration / undertaking, the foreign nationals / foreign promoters are not required to apply for the PAN in India. However, the responsibility shifts to the national promoter / national director to comply with the PAN formalities at the time of Incorporation of a New Company under the Companies Act 2013. Further, it is also mandatory to have one local / national director in newly incorporated companies under the Companies Act 2013.

(Author, Jinesh Bhagdev, Practicing Chartered Accountant, Mumbai can be contacted at jinesh@jbhagdev.com and Co- author Mr. Anandkumar Tibrewala can be contacted as anand@adcoindia.co.in)

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0 responses to “MCA issues Circular on Applicability of PAN requirement for Foreign Nationals as Director of Company at the time of Incorporation”

  1. Rajat Agarwal says:

    Is this applicable for existing foreign nationalist who are directors since previous years in the company incorporated in the year 2005 or this is applicable for newly incorporated companies?

    Kindly clarify.
    Thanks & Regards
    Rajat Agarwal

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