Restricts backdoor entry of foreign investors from neighbouring countries

On 1 June 2022, the Government of India announced that any national from a country that shares a land border with the country (China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar) must seek security clearance from the Ministry of Home Affairs, if they wants to get appointed as director in any Indian company. This steps is a preventive measure which aims to restrict the backdoor entry of Chinese companies or investors into India.

No application number shall be generated when the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs has been attached, along with the application for Director Identification Number.

The directors are required to sign a declaration and verification as stated in the circular issues by the Ministry of Corporate Affairs ensuring that stated approvals are duly in place.

• Type:

  • Entry and establishment (Ownership and control, Approval and admission, Other)

• Industry:

  • Not industry specific

• Sources:

  • Government of India, Government of India MCA notification, https://www.mca.gov.in/bin/dms/getdocument?mds=U4Pl6Cz4l3T9YHrD1ZOq2g%253D%253D&type=open, 01 Jun 2022
  • taxguru, Govt. Clearance must for appointment as directors in Indian Companies, https://taxguru.in/company-law/govt-clearance-appointment-directors-indian-companies.html, 05 Jun 2022