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- |
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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 |
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sectoral caps and entry routes ), applicable laws and other |
with the external commercial borrowing ( ECB ) guidelines |
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conditionality ’ s including security conditions , non-resident |
of the RBI . |
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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 -
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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 ; |
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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 |
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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 |
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( i ) Transfer is at a price which falls outside the pricing |
n |
The price as applicable to transfer of shares from resident |
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guidelines specified by the Reserve Bank from time to time |
to non-resident as per the pricing guidelines laid down by |
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and the transaction does not fall under the exception given |
the Reserve Bank from time to time , where the issue of |
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in para 3.4.5.2 . of FDI policy that can be seen from the |
shares is on preferential allotment . |
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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 |
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( ii ) Transfer of capital instruments by the non-resident |
provisions of the Companies Act , 1956 , by way of |
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acquirer involving deferment of payment of the amount of |
subscription to its Memorandum of Association , such |
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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 |
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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 ) |
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( excluding those deemed as ECB ) in convertible foreign |
Q . 11 How can a foreign investor transfer funds into an Indian |
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currency into equity shares / fully compulsorily and |
company ? |
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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 |
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know-how fee , royalty , subject to entry route , sectoral cap |
maintained with an Authorized Dealer category-I bank- |
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and pricing guidelines ( as per the provision of para 3.4.2 |
( AD category-1 bank ) |
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above ) and compliance with applicable tax laws . |
( http :// rbidocs . rbi . org . in / rdocs / FEMAMASTER / PDFs / 1061 . pdf ) |
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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 |
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( i ) import of capital goods / machinery / equipment |
consideration for issue of shares |
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( excluding second-hand machinery ), subject to compliance |
( iv ) conversion of import payables / pre incorporation |
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with the conditions . |
expenses / share swap can be treated as consideration for |
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( ii ) pre-operative / pre-incorporation expenses ( including |
issue of shares with the approval of FIPB |
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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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