Regulation 9 - Approval of the Reserve Bank in certain cases - Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004

9. Approval of the Reserve Bank in certain cases (1) An Indian Party, which does not satisfy the eligibility norms under Regulations 6 or 7 or 8, may apply to the Reserve Bank for approval. 3 [ (2) Application for direct investment in Joint Venture / Wholly Owned Subsidiary outside India, or by way of exchange for shares of a foreign company, shall be made in Part I of the Form ODI , as prescribed by the Reserve Bank from time to time.] 4 [ (2A) An application made under sub-regulation (2) in Form ODI , as prescribed by the Reserve Bank from time to time (a) for the purpose of investment by way of remittance from India, in an existing company outside India, shall be accompanied, by the valuation of shares of the company outside India, made- (i) where the investment is more than USD 5 (five) million, by a Category I Merchant Banker registered with SEBI or an Investment Banker / Merchant Banker registered with the appropriate regulatory authority in the host country; and (ii) in all other cases, by a Chartered Accountant or a Certified Public Accountant. (b) for the purposes of investment by acquisition of shares of an existing company outside India where the consideration is to be paid fully or partly by issue of the Indian party s shares, shall be accompanied by the valuation carried out by a Category I Merchant Banker registered with the SEBI or an Investment Banker / Merchant Banker registered with the appropriate regulatory authority in the host country. ] (3) The Reserve Bank may, inter alia, take into account following factors while considering the application made under sub-regulation (2): a. Prima facie viability of the Joint Venture/Wholly Owned Subsidiary outside India; b. Contribution to external trade and other benefits which will accrue to India through such investment; c. Financial position and business track record of the Indian Party and the foreign entity; d. Expertise and experience of the Indian Party in the same or related line of activity of the Joint Venture or Wholly Owned Subsidiary outside India. **************** NOTES:- 1. Substituted vide Notification No. 180/2008 dated 05-09-2008 , w.e.f. 05-09-2008 before it was read as, 2. Application for direct investment in Joint Venture/Wholly Owned Subsidiary outside India, or by way of exchange for shares of a foreign company, shall be made in Form ODI, or in Form ODB, as applicable. 2. Substituted vide Notification No. FEMA 314/RB-2014, dated 03-07-2014 , w.e.f. 03-07-2014 before it was read as, 1 [ (2) Application for direct investment in Joint Venture/Wholly Owned Subsidiary outside India, or by way of exchange for shares of a foreign company, shall be made in Part I of the Form ODI. ] 3. Substituted vide Notification No. FEMA 314/RB-2014, dated 03-07-2014 , w.e.f. 03-07-2014 before it was read as, (2A) An application made under sub-regulation (2) in Form ODI (a) for the purpose of investment by way of remittance from India, in an existing company outside India, shall be accompanied, by the valuation of shares of the company outside India, made- (i) where the investment is more than USD 5 (five) million, by a Category I Merchant Banker registered with SEBI or an Investment Banker/Merchant Banker registered with the appropriate regulatory authority in the host country; and (ii) in all other cases, by a Chartered Accountant or a Certified Public Accountant. (b) for the purposes of investment by acquisition of shares of an existing company outside India where the consideration is to be paid fully or partly by issue of the Indian party s shares, shall be accompanied by the valuation carried out by a Category I Merchant Banker registered with the SEBI or an Investment Banker/Merchant Banker registered with the appropriate regulatory authority in the host country.