Appointment of a Non Resident Indian as the CEO of an Indian Company- Requirement of PAN allotment to an NRI
In the on going era of mandatory statutes to be monitored, there are certain parameters being laid down in order to mandate the specific class of persons to obtain the Permanent Account Number (PAN). PAN is technically a unique code provided to a class of persons, by the statutory authorities in order to obtain the various information of the PAN holder in relation to the governmental norms and tax implications. The PAN holder data is being stored in the online platform secured and maintained by the tax authorities. It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. It is statutory responsibility of a person receiving document relating to economic or financial transactions notified by the CBDT to ensure that PAN has been duly quoted in the document.
Allotment of PAN is mandatory for all types of transactions inter alia, opening a Demat account, Purchase and sale of immoveable property, filing of income tax returns etc. This article stipulates the procedure and the various documentation for allotment of PAN to a Non Resident Indian.
As we see PAN is an unique ID provided as a proof of identity in India. So under what circumstances would a Non Resident Indian required to apply for a PAN application.?
When An NRI is Mandatorily Required to Possess a PAN Card?
An NRI is mandatorily required to possess a PAN card in the following scenarios:
- If an NRI earns a taxable income in India.
- If an NRI wishes to trade in shares, through depository or through broker
- If he\she wants to invest in Mutual Funds.
- If he\she desires to purchase some land or any other property in India for purpose other than trading.
In addition to the above statutory pointers, we would here be discussing on the appointment of a Non Resident Indian as the CEO of the Indian Company.
A CEO need not be a director of the company. He may be merely an employee of the Company. Any officer of the company may be appointed/ designated as CEO of the Company. Further, the CEO who is not a director may be appointed by the Board of Directors. He need not be appointed by the Shareholders of the Company nor his appointment is subject to shareholders’ approval, unless he is a Director of the Company. A CEO can be a director, managing director (MD), chairman or an employee, but no person other than the director can become a MD.
Allotment of PAN to a Non-Resident Indian for Being Appointed as the CEO of an Indian Company
Any Indian company wishes to appoint its Director who is a non resident Indian as the CEO of the company, such non resident Indian is required to obtain a PAN mandatorily.
Documents Required for the Application of PAN Allotment to a Non-Resident Indian:
The documents required for the allotment of PAN to a Non Resident India inter alia includes:
1. PAN application in Form 49AA duly filled and signed by the Non Resident Indian as per the required manner.(Inclusive of photograph)
2. Certificate by the employer of the Indian Company in which the Non Resident Indian is the director in Annexure B duly filled and sealed as per the requirement.
3. Self attested passport copy.
4. Self attested address proof of the Non Resident Indian.
5. Latest bank statement of the Non Resident Indian.
6. Certificate of employment duly filled and signed by the employer of the Indian Company.
7. Current active Visa copy of the Non Resident Indian.
The above documents duly filled and complete in all aspects are mandatorily required to be submitted to the NSDL for the PAN application to be processed post which the PAN would be allotted to the Non Resident Indian and the copy of PAN would be delivered to the registered company address in India.
Upon such PAN allotment, the procedure for appointment of a CEO as prescribed by the Ministry of Corporate Affairs is to be followed and filed.
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