TMI BlogScheme for Acquisition/Transfer by a person resident outside India of capital contribution or profit share of Limited Liability Partnerships (LLPs)X X X X Extracts X X X X X X X X Extracts X X X X ..... vestors: A person resident outside India (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than an entity in Pakistan or Bangladesh), not being a Foreign Portfolio Investor or Foreign Institutional Investor or Foreign Venture Capital Investor registered in accordance with SEBI guidelines, may contribute foreign capital either by way of capital contribution or by way of acquisition / transfer of profit shares in the capital structure of an LLP. 2. Eligible investment Contribution to the capital of an LLP would be an eligible investment under the scheme. Note: Investment by way of 'profit share' will fall under the category of reinvestment of earnings 3. Eligibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of an LLP ) and a valuation certificate to that effect shall be issued by the Chartered Accountant or by a practicing Cost Accountant or by an approved valuer from the panel maintained by the Central Government. In case of transfer of capital contribution / profit share from a resident to a non-resident, the transfer shall be for a consideration equal to or more than the fair price of capital contribution / profit share of an LLP. Further, in case of transfer of capital contribution / profit share from a non-resident to resident, the transfer shall be for a consideration which is less than or equal to the fair price of the capital contribution / profit share of an LLP. 5. Mode of payment Payment by an investor towards capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Downstream investment (a) An Indian company, having foreign investment (direct or indirect, irrespective of percentage of such foreign investment) will be permitted to make downstream investment in an LLP only if both, the company as well as the LLP, are operating in sectors where 100% FDI is allowed under the automatic route and there are no FDI- linked performance related conditions. Onus shall be on the LLP accepting investment from Indian Company registered under the provisions of the companies Act, as applicable to ensure compliance with downstream requirement as stated above. (b) A LLP with FDI under this scheme will not be eligible to make any downstream investments in any entity in India. 5. Substituted vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) A LLP engaged in following sectors/activities shall not be eligible to accept (FDI): (a) Sectors eligible to accept 100% FDI under automatic route but are subject to FDI-linked performance related conditions (for example minimum capitalisation norms applicable to 'Non-Banking Finance Companies' or 'Development of Townships, Housing, Built-up infrastructure and Construction-development projects', etc.); or (b) Sectors eligible to accept less than 100% FDI under automatic route; or (c) Sectors eligible to accept FDI under Government Approval route; or (d) Agricultural/plantation activity and print media; or (e) Sectors ineligible to accept FDI i.e. any sector which is prohibited under extant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket practice (hereinafter referred to as fair price of capital contribution/profit share of an LLP ) and a valuation certificate to that effect shall be issued by the Chartered Accountant or by a practicing Cost Accountant or by an approved valuer from the panel maintained by the Central Government. In case of transfer of capital contribution/profit share from a resident to a non-resident, the transfer shall be for a consideration equal to or more than the fair price of capital contribution/profit share of an LLP. Further, in case of transfer of capital contribution/profit share from a non-resident to resident, the transfer shall be for a consideration which is less than or equal to the fair price of the capital contribution/profit sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 2 [(iv) All LLPs which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank of India, on or before the 15th day of July of each year, a report titled Annual Return on Foreign Liabilities and Assets as specified by the Reserve Bank from time to time] 4 [8. ***] 9. Other Conditions (i) In case an LLP with FDI has a body corporate as a designated partner or nominates an individual to act as a designated partner in accordance with the provisions of Section 7 of the Limited Liability Partnersh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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