DIN Security Clearance

Importance of DIN Security Clearance

The requirement of security clearance for DIN allotment is a significant step introduced by the Government of India to protect the national security and maintain integrity in corporate appointments, a move gained urgency following high-profile incidents involving Chinese companies linked to fraud, money laundering, and questionable financial activities within Indian entities. By mandating prior approval from the Ministry of Home Affairs, the government aims to strengthen regulatory oversight and prevent such risks from recurring. Therefore, the DIN security clearance mechanism is especially critical in preventing the backdoor entry of foreign investors and entities, particularly from countries that share land borders with India, including China, allows that foreign nationals are thoroughly vetted before assuming directorial roles in Indian companies, thereby protecting strategic sectors and reinforcing India’s commitment to secure and transparent corporate governance.

By making DIN security clearance mandatory for nationals of countries sharing land borders with India, the government seeks to prevent any potential misuse of corporate positions for activities detrimental to national interests and also helps that companies operating in India are not influenced or controlled by individuals or entities with hostile affiliations.

Process of Obtaining DIN Security Clearance

Security Clearance Portal by the Ministry of Home Affairs

To facilitate a more efficient and transparent process, the Ministry of Home Affairs (MHA) has launched a dedicated Security Clearance Portal — https://scponline.mha.gov.in, centralized web application has been developed to digitize and streamline all applications related to security clearances for foreign nationals, handled by the Foreigners Division of MHA and also include clearances for visits to Protected/Restricted Areas, Indian Territorial Waters, and permissions for filming documentaries, among other activities. For DIN applicants who require MHA clearance, this portal now serves as the official platform for submitting and tracking their applications.

Steps for Foreign Applicant to Apply for DIN

-Obtain Digital Signature Certificate (DSC)

Before initiating the DIN application process, a foreign applicant must obtain a valid Digital Signature Certificate (DSC) issued by a licensed Certifying Authority in India, required for signing the application form electronically and Foreign nationals may apply for a DSC through Indian service providers Compliance Calendar LLP after submitting identity and address proofs, which must be duly notarized and apostilled, depending on whether the applicant is from a Hague Convention country or a non-Hague country.

-Security Clearance from Ministry of Home Affairs (MHA)

In case the applicant is a citizen of a country sharing a land border with India — such as China, Bangladesh, Pakistan, Nepal, Bhutan, Myanmar, or Afghanistan — obtaining prior security clearance from the Ministry of Home Affairs (MHA) is mandatory before proceeding with the DIN application. The security clearance must be obtained through the Security Clearance Portal at https://scponline.mha.gov.in.

As part of the security clearance process, the applicant must submit all necessary documents, including duly certified proof of identity (passport) and proof of address, along with a certified true copy of the Board Resolution passed by the Indian company/LLP proposing the appointment of the individual as a Director/DP's, whether as an Additional Director or under any other director designation. Only after receiving the security clearance approval can the applicant move forward with filing the DIN application filing through form DIR-3 on the Ministry of Corporate Affairs (MCA) portal.

The foreign applicant must arrange the following documents before filing a request at MHA:-

• Certified and apostilled/notarized copy of the passport (mandatory for foreign nationals).

• Certified proof of residential address (such as a bank statement or utility bill).

• Email ID, Contact No, Place of Birth, Citizenship proof etc.

• Recent photograph.

  Note: All documents must be in English or translated into English and duly certified as per MCA guidelines.

-Filing the eForm DIR-3 (For Existing Companies)

If the foreign national is being appointed in an existing Indian company, the application must be filed electronically through eForm DIR-3 on the MCA portal, should be duly filled, digitally signed by the applicant, and further certified by a practicing professional (Company Secretary, Chartered Accountant, or Cost Accountant in India) must attach the all above cited documents for foreign nationals along with DIN Security clearance certificate received from the MHA/MCA.

Note: If the foreign national is proposed to be appointed as the first director in a newly incorporated company, the DIN application is not required to be filed separately through Form DIR-3. Instead, the DIN allotment is integrated within the company's incorporation process through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form on the MCA portal. However, before proceeding with the incorporation, the applicant must first apply for and obtain Security Clearance from the Ministry of Home Affairs (MHA) through the Security Clearance Portal. Only after receiving the DIN security clearance approval letter can the applicant proceed with filing the SPICe+ form for incorporation and simultaneously obtain a DIN for the first time along with the company registration.

Thus, for foreign nationals from countries sharing land borders with India, Security Clearance must be obtained prior to initiating the incorporation process where DIN allotment is involved.

-Pay Applicable Fees
The prescribed fee INR 500/- only in all cases for DIN allotment for filing form DIR-3 Application must be paid online through the MCA portal at the time of submission of the form. The system generates a Service Request Number (SRN) for tracking the status of the application.

-Verification and Approval by MCA
After submission or filing of form DIR-3 Application, the MCA verifies the application and documents and if the application is found complete and compliant, the DIN is approved and communicated to the applicant via registered email by providing DIN Approval letter. In case of any discrepancies, the application may be resubmitted with corrections as directed by MCA.

Challenges for DIN Security Clearance

While the DIN security clearance process is designed to be straightforward, applicants may encounter certain

Delayed Approvals at MHA and No response quickly 

The verification and DIN security clearance process at MHA may take longer than anticipated due to administrative backlog at the Ministry of Home Affairs (MHA) or MCA and scrutiny for certain applicants, especially those from sensitive jurisdictions, can further delay the process.

Rejection of DIN Security Application

Applications may be rejected if the applicant has a criminal background or false documents furnished, has been involved in financial fraud, suspected some illegal activity, or fails to meet the eligibility criteria under the Companies Act 2013. Therefore In such cases, you should take professional legal advice at Compliance Calendar LLP before reapplying or initiating appeal procedures/ fresh Application.

Lack of Awareness and Understanding

Many foreign applicants are unaware of the mandatory disclosure requirements and the seriousness of false or incomplete declarations and misrepresentation or omission of material facts—such as dual citizenship, previous convictions, or other disqualifications—can result in rejection or further legal complications or failed in verification process.

Improper Documentation

Submission of incorrect, incomplete, or improperly notarized/apostilled documents (depending on Hague/non-Hague country status) is a common reason for delay or rejection, as applicants and even intermediaries fail to follow the prescribed document certification standards specially failed to provide Indian company board resolution in case of appointment of Directors proposed for Indian company. 

Coordination Challenges with Indian Companies

In cases where the foreign national is being appointed in an existing Indian company, timely submission of the Board Resolution copy and other supporting documents by the Indian entity is important. Delays or errors on the company’s part can affect the overall DIN security clearance timeline.

Technical and Portal Issues

Occasional technical glitches or lack of familiarity with the Security Clearance Portal (https://scponline.mha.gov.in) may hinder smooth submission, status tracking, or retrieval of acknowledgment. More importantly, the portal does not provide any official contact number or email ID for correspondence or grievance redressal.In the absence of a defined escalation mechanism or support channel, applicants are often left uncertain about the next steps, which can cause significant delays in the clearance and DIN application process.

Here is the dashboard for one of the client at Compliance Calendar, got the DIN Security clearance got very easily and they are enjoying the foreign directorship and doing business in India hassle-free. 

MCA Updates on DIN Security Clearance

As per the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022, further insertions have been made in the Annexures to Form DIR-2 and Form DIR-3 to ensure compliance with the new mandatory security clearance requirement.

(A) In Form DIR-2 (Consent to act as Director):

A new clause under the Declaration section mandates the proposed director to explicitly declare one of the following:

• “I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director.”

• [To be ticked if the applicant is not a national of a country sharing land border with India]

OR

• “I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached.”

  [To be ticked if the applicant is a national of countries like China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, or Afghanistan]

(B) In Form DIR-3 (Application for DIN):

A similar declaration has been added under the Verification section after serial number 3, inserted as serial number 3A, where the applicant must declare either:

• “I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number.”

OR

• “I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached.”

Annual DIN KYC (DIR-3 KYC) Compliance for Foreign Directors

Every individual who has been allotted a Director Identification Number (DIN) under Section 154 of the Companies Act, 2013, must file an annual Know Your Customer (KYC) with the Ministry of Corporate Affairs (MCA), this compliance is applicable to both Indian and foreign nationals who hold a DIN, whether active or inactive.

Hence, Every individual holding a DIN, including foreign nationals of Foreign Subsidiary company, Foreign WOS, Indian Company, is required to file an Annual KYC through Form DIR-3 KYC and must be done once every financial year before 30th September.

Failure to file DIR-3 KYC leads to deactivation of the DIN, and reactivation is only possible after paying a penalty of INR 5,000 each DIN. Foreign directors must check that their DIN remains active to continue serving as directors in Indian companies. Further, If there is any change in the personal particulars of a foreign director (such as name, passport number, residential address, etc.), the same must be updated with the MCA by filing Form DIR-6. Supporting documents must be duly certified and submitted through the MCA portal.

DIR-3 KYC is a mandatory e-form by the MCA that every individual holding a DIN must submit annually to verify and update their personal details, such as:

• Full Name
• Date of Birth
• Nationality
• PAN (for Indian nationals)
• Passport (mandatory for foreign nationals)
• Address proof 
• Email ID and Mobile Number (with OTP verification)

But, For individuals who have already filed DIR-3 KYC once and do not need to change any details, WEB KYC needs to be done as follow :

1. Login to the MCA Portal

2. Go to DIR-3 KYC Web service

3. Enter DIN and OTPs received on email and mobile

4. Submit after verification

No DSC or professional certification required for web KYC.

Final DIN Security clearance certificates

Declaration by the Applicant (Form DIR-3)

Director Identification Number (DIN) – One Person, One DIN Rule Under Companies Act, 2013

Prohibition on Holding More than One DIN under Section 155 of the Companies Act, 2013:

"No individual who has already been allotted a Director Identification Number under section 154 shall apply for, obtain, or possess another Director Identification Number."

This means that every individual is allowed to hold only one DIN, regardless of the number of companies or LLPs in which they serve as a director, use of multiple DINs is a violation of the Companies Act 2013 and may invite penalties by MCA ROC-RD Adjudication

Adjudication and Penalties for Non-Compliance – Section 159

If any individual or director of a company fails to comply with the provisions of:

-Section 152 (Appointment of directors),

-Section 155 (One DIN rule), or

-Section 156 (Director to intimate DIN to the company),

Then, for DIN non compliance for above provisions, as per Section 159 of the Companies Act 2013 shall apply:-

“Such individual or director shall be liable to a penalty which may extend to INR 50,000, and where the default is a continuing one, with a further penalty which may extend to INR 500 for each day after the first during which such default continues.”

The Ministry of Corporate Affairs, in exercise of powers under Section 454, appoints MCA Adjudicating Officers to assess and impose penalties for such violations.

Common Reasons for Rejection of DIN Applications

A DIN Security Clearance application filed using Form DIR-3 may be rejected by the Ministry of Corporate Affairs (MCA) if there are discrepancies in the documentation or inaccuracies in the information submitted, applies especially to foreign nationals from countries sharing land borders with India, where prior security clearance from the Ministry of Home Affairs (MHA) is mandatory.

Below are the most frequent reasons for rejection of DIN applications submitted for security clearance:

1. Invalid or Expired Supporting Documents

Documents such as passports, utility bills, or driver’s licenses must be valid, legible, and recently issued. Expired or blurred documents, or those not properly notarized and apostilled, are considered invalid. If any such document is attached, the DIN security clearance application will be rejected.

2. Non-Government Issued Proof of Identity

Identity proofs must be issued by a recognized government authority — either Indian or foreign (for non-residents). Proofs issued by private institutions, employers, or educational establishments are not acceptable under MCA norms.

3. Handwritten Entries on Application or Supporting Documents

DIN applications and supporting evidence must be typed and error-free. Handwritten entries, overwriting, or manual corrections are not permitted and lead to rejection during verification.

4. Duplicate DIN Application

MCA allows only one DIN per individual. If a DIN has already been allotted or is under process, submitting another application will be considered a duplicate and will be rejected.

5. Photograph Not Affixed

A clear passport-size photograph of the applicant must be affixed at the designated space in the form. Forms without the applicant’s photograph will be summarily rejected.

6. Missing Signatures

All signatures must be appended at their prescribed positions. This includes the applicant’s signature and the digital signature of a certifying professional (CA/CS/CMA). Unsigned or partially signed applications are treated as incomplete.

7. Name Mismatch

The name mentioned in the DIN application must match exactly with the name on the identity document. Differences in initials, order, spelling, or abbreviations may result in rejection.

8. Father’s Name Mismatch

The father’s name provided in the application must match the identity documents word-for-word. Discrepancies lead to questions of authenticity and can cause rejections.

9. Mismatch in Date of Birth

The date of birth (DOB) in the application form must match the date on the supporting ID proof exactly. Even minor formatting differences (e.g., 21-07-1982 vs 07-21-1982) can lead to rejections.

10. Address Mismatch

The residential address entered must match the one in the attached address proof. Any inconsistency — such as postal codes, apartment numbers, or spelling — may result in a failed verification.

11. Incorrect Gender Selection

The gender mentioned in Form DIR-3 must match the gender specified in the government-issued identification document. Errors in selection may cause the application to be flagged for correction.

12. Incorrect Identification Number

The ID number (e.g., Passport No.) must be entered accurately. A mismatch between the number entered in the form and the number shown in the supporting document will invalidate the application.

13. Lack of Self-Attestation

All documents submitted must be self-attested by the applicant. In the absence of such attestation, the documents are considered unauthenticated, and the application may be outright rejected.

CCL Tips 

Before submitting the DIN Security Clearance application at the Ministry of Corporate Affairs (MCA), including Form DIR-3, must carefully verify all details entered in the form and MCA portal. Each data point — including name, date of birth, address, identity proof number, and other personal particulars — must exactly match the supporting documents submitted. Any discrepancy, however minor, may result in rejection of the application.

For applicants who are citizens of countries sharing a land border with India (e.g., China, Bangladesh, Pakistan, Nepal, Bhutan, Myanmar, and Afghanistan), CCL recommended you to without registering a new company as a foreign subsidiary or normal Indian company with foreign directorship, should choose initially incorporate the company with Indian resident directors or chose any existing company. Once the DIN security clearance is obtained from the Ministry of Home Affairs (MHA), the foreign national can then be appointed as a director in the existing company through the proper MCA filing process.