TMI BlogForeign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2014X X X X Extracts X X X X X X X X Extracts X X X X ..... nk of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 ( Notification No. FEMA 20/2000-RB dated 3rd May, 2000 ) namely: Short Title Commencement 1. (i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by A Person Resident Outside India) (Third Amendment) Regulations, 2014. (ii) Save as expressly provided, the amendment shall be deemed to have come into force from 20th day of May 2011. Amendment to Regulation 2 2. In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 ( Notification No. FEMA 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip Act, 2008. 1. Eligible Investors A person resident outside India or an entity incorporated outside India shall be eligible investor for the purpose of FDI in LLPs. However, the following persons shall not be eligible to invest in LLPs: (i) a citizen/entity of Pakistan and Bangladesh or (ii) a SEBI registered Foreign Institutional Investor (FII) or (iii) a SEBI registered Foreign Venture Capital Investor (FVCI) or (iv) a SEBI registered Qualified Foreign Investor (QFI) or (v) a Foreign Portfolio Investor registered in accordance with Securities Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 (RFPI). 2. Eligibility of LLP for accepting foreign Investment (i) A LL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll fall under the category of reinvestment of earnings. 4. Entry Route FDI in a LLP shall require prior Government/FIPB approval. Any form of foreign investment in a LLP, direct or indirect (regardless of nature of 'ownership' or 'control' of an Indian Company) shall require Government/FIPB approval. 5. Pricing FDI in a LLP either by way of capital contribution or by way of acquisition/transfer of profit shares, would have to be more than or equal to the fair price as worked out with any valuation norm which is internationally accepted/adopted as per market practice (hereinafter referred to as fair price of capital contribution/profit share of an LLP ) and a valuation certificate to that effect shall be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above) as regards pricing at the earliest but not later than 30 days from the date of receipt of the amount of consideration. The report would be acknowledged by the Regional Office concerned, which would allot a Unique Identification Number (UIN) for the amount reported. (ii) The AD Category - I bank in India, receiving the remittance should obtain a KYC report in respect of the foreign investor from the overseas bank remitting the amount. (iii) Disinvestment /transfer of capital contribution or profit share between a resident and a non-resident (or vice versa) shall required to be reported within 60 days from the date of receipt of funds in Form FOREIGN DIRECT INVESTMENT-LLP(II) as specified by Reserve Bank from time to time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The designated partners will be responsible for compliance with all the above conditions and also liable for all penalties imposed on the LLP for their contravention, if any. (iii) Conversion of a company with FDI, into an LLP, will be allowed only if the above stipulations (except the stipulation as regards mode of payment) are met and with the prior approval of FIPB/Government. (iv) LLPs shall not be permitted to avail External Commercial Borrowings (ECBs). 10. The LLP which have received foreign investment between May 20, 2011 to the date of issuance of instructions issued in this regard by Reserve Bank shall comply with the reporting requirement in respect of FDI within 30 or 60 days, as applicable, from the date of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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