n |
The forms and other details can be seen from the following |
n |
The details on forms, conditions and guidelines can be |
link- http:// www. mca. gov. in / MCA21 / RegisterNewComp. html |
seen from the Page No. 20 to 29 of the following link- |
||
Most of the activities can be done online. |
http:// dipp. nic. in / English / Policies / FDI _ Circular _ 01 _ 2013. pdf |
n |
It is preferable to engage the services of a professional |
Q. 9 What are the instruments allowed for receiving FDI? |
agency in carrying out above activities. |
The instruments for receiving FDI include: Investments made in |
|
n |
The process of notarization and apostillment is different for |
equity shares, fully and mandatorily convertible preference |
each country. The details of the same for countries |
shares and fully and mandatorily convertible debentures with |
|
signatory to Hague convention can be seen from the |
the pricing being decided up front as a figure or based on the |
|
following link- |
formula that is decided up front. Issue of warrants, partly paid |
|
http:// www. hcch. net / index _ en. php? act = text. display & tid = 37 |
shares etc require prior approval of FIPB. |
n |
Alternatively the foreign investor can also acquire shares in |
n |
Issue of non-convertible, optionally convertible or partially |
existing company: Subject to FDI sectoral policy( relating to |
convertible preference shares / debentures needs to comply |
||
sectoral caps and entry routes), applicable laws and other |
with the external commercial borrowing( ECB) guidelines |
||
conditionality’ s including security conditions, non-resident |
of the RBI. |
||
investors can also invest in Indian companies by purchasing / acquiring existing shares from Indian shareholders or from other non-resident shareholders. |
n |
The inward remittances received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. |
n |
The Form FC-TRS should be submitted to the AD
Category-I Bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given time frame would be on
|
Q. 10 What are the rules relating to pricing of issue of shares?
Price of shares issued to persons resident outside India under the FDI Policy, shall not be less than-
|
|
the transferor / transferee, resident in India. |
n |
The price worked out in accordance with the SEBI |
|
n |
The sale consideration in respect of equity instruments purchased by a person resident outside India, remitted into |
guidelines, as applicable, where the shares of the company is listed on any recognized stock exchange in India; |
|
India through normal banking channels, shall be subjected |
n |
The fair valuation of shares done by a SEBI registered |
|
to a Know Your Customer( KYC) check by the remittance |
Category- I Merchant Banker or a Chartered Accountant |
||
receiving AD Category-I bank. |
as per the discounted free cash flow method, where the |
||
n |
Prior permission of RBI in certain cases for transfer of capital instruments: |
shares of the company is not listed on any recognized stock exchange in India; and |
|
( i) Transfer is at a price which falls outside the pricing |
n |
The price as applicable to transfer of shares from resident |
|
guidelines specified by the Reserve Bank from time to time |
to non-resident as per the pricing guidelines laid down by |
||
and the transaction does not fall under the exception given |
the Reserve Bank from time to time, where the issue of |
||
in para 3.4.5.2. of FDI policy that can be seen from the |
shares is on preferential allotment. |
||
Page No. 22 & 23 of the following link- |
n |
However, where non-residents( including NRIs) are making |
|
( http:// dipp. nic. in / English / Policies / FDI _ Circular _ 01 _ 2013. pdf), |
investments in an Indian company in compliance with the |
||
( ii) Transfer of capital instruments by the non-resident |
provisions of the Companies Act, 1956, by way of |
||
acquirer involving deferment of payment of the amount of |
subscription to its Memorandum of Association, such |
||
consideration, |
investments may be made at face value subject to their |
||
( iii) Transfer of any capital instrument, by way of gift by a |
eligibility to invest under the FDI scheme. The above |
||
person resident in India to a person resident outside India. |
information can be seen from the Page No. 20 of the |
||
n |
Indian companies have been granted general permission |
following link- |
|
for conversion of External Commercial Borrowings( ECB) |
( http:// dipp. nic. in / English / Policies / FDI _ Circular _ 01 _ 2013. pdf) |
||
( excluding those deemed as ECB) in convertible foreign |
Q. 11 How can a foreign investor transfer funds into an Indian |
||
currency into equity shares / fully compulsorily and |
company? |
||
mandatorily convertible preference shares, subject to the conditions and reporting requirements. |
The modes of transfer allowed are: |
||
n |
General permission is also available for issue of |
( i) |
inward remittance through normal banking channels. |
shares / preference shares against lump sum technical |
( ii) debit to NRE / FCNR account of a person concerned and |
||
know-how fee, royalty, subject to entry route, sectoral cap |
maintained with an Authorized Dealer category-I bank- |
||
and pricing guidelines( as per the provision of para 3.4.2 |
( AD category-1 bank) |
||
above) and compliance with applicable tax laws. |
( http:// rbidocs. rbi. org. in / rdocs / FEMAMASTER / PDFs / 1061. pdf) |
||
n |
Issue of equity shares under the FDI policy is allowed under the |
( iii) conversion of royalty / lump sum / technical knowhow fee |
|
Government route for the following: |
due for payment, or conversion of ECB, shall be treated as |
||
( i) import of capital goods / machinery / equipment |
consideration for issue of shares |
||
( excluding second-hand machinery), subject to compliance |
( iv) conversion of import payables / pre incorporation |
||
with the conditions. |
expenses / share swap can be treated as consideration for |
||
( ii) pre-operative / pre-incorporation expenses( including |
issue of shares with the approval of FIPB |
||
payments of rent etc.), subject to compliance with the conditions |
( v) debit to non-interest bearing escrow account in Indian
Rupees in India which is opened with the approval from
|
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