TMI BlogConsolidated FDI PolicyX X X X Extracts X X X X X X X X Extracts X X X X ..... t, as distinguished from portfolio investment, has the connotation of establishing a lasting interest in an enterprise that is resident in an economy other than that of the investor. 1.1.2 The Government has put in place a policy framework on Foreign Direct Investment, which is transparent, predictable and easily comprehensible. This framework is embodied in the Circular on Consolidated FDI Policy, which may be updated every year, to capture and keep pace with the regulatory changes, effected in the interregnum. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce Industry, Government of India makes policy pronouncements on FDI through Press Notes/Press Releases which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 (notification No. FEMA 20/2000-RB dated May 3, 2000). These notifications take effect from the date of issue of Press Notes/ Press Releases, unless specified otherwise therein. In case of any conflict, the relevant FEMA Notification will prevail. The procedural instructions are issued by the Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvertible debentures shall be required to be fully paid, and should be mandatorily and fully convertible. Further, warrant includes Share Warrant issued by an Indian Company in accordance to provisions of the Companies Act, as applicable. 2.1.6 Capital account transaction means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and includes transactions referred to in sub-section (3) of section 6 of FEMA. 2.1.7 Control shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. For the purposes of Limited Liability Partnership, control will mean right to appoint majority of the designated partners, where such designated partners, with specific exclusion to others, have control over all the policies of the LLP. 2.1.8 Depository Receipt (DR) means a negotiable security issued outside India by a Depository bank, on behalf of an Indian company, which rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fications.aspx?Id=174 Subsequent amendment notifications are available at https://rbi.org.in/Scripts/BS_FemaNotifications.aspx). 2.1.13 FEMA means the Foreign Exchange Management Act, 1999 (42 of 1999). 2.1.14 FIPB means the Foreign Investment Promotion Board constituted by the Government of India. Details of FIPB including filing application for FIPB can be accessed on the FIPB website www.fipb.gov.in. 2.1.15 Foreign Institutional Investor (FII) means an entity established or incorporated outside India which proposes to make investment in India and which is registered as a FII in accordance with the Securities and Exchange Board of India (SEBI) (Foreign Institutional Investor) Regulations 1995. 2.1.16 Foreign Portfolio Investor (FPI) 1 means a person registered in accordance with the provisions of Securities and Exchange Board of India (SEBI) (Foreign Portfolio Investors) Regulations, 2014, as amended from time to time. 2.1.17 Foreign Venture Capital Investor (FVCI) means an investor incorporated and established outside India, which is registered under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity makes an investment. 2.1.27 Limited Liability Partnership means a Limited Liability Partnership firm, formed and registered under the Limited Liability Partnership Act, 2008. 2.1.28 Manufacture , with its grammatical variations, means a change in a non-living physical object or article or thing- (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. 2.1.29 Non-resident entity means a person resident outside India as defined under FEMA. 2.1.30 Non-Resident Indian (NRI) means an individual resident outside India who is a citizen of India or is an Overseas Citizen of India cardholder within the meaning of section 7 (A) of the Citizenship Act, 1955. Persons of Indian Origin cardholders registered as such under Notification No. 26011/4/98 F.I. dated 19.8.2002 issued by the Central Government are deemed to be Overseas Citizen of India cardholders 2.1.31 A company is considered as Owned by resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India. 2.1.35 Person resident outside India means a person who is not a Person resident in India. 2.1.36 Portfolio Investment Scheme means the Portfolio Investment Scheme referred to in Schedules 2, 2A 3 of FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. 2.1.37 RBI means the Reserve Bank of India established under the Reserve Bank of India Act, 1934. 2.1.38 Resident Entity means Person resident in India excluding an individual. 2.1.39 Resident Indian Citizen shall be interpreted in line with the definition of person resident in India as per FEMA, 1999, read in conjunction with the Indian Citizenship Act, 1955. 2.1.40 SEBI means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992. 2.1.41 SEZ means a Special Economic Zone as defined in Special Economic Zone Act, 2005. 2.1.42 SIA means Secretariat of Industrial Assistance in DIPP, Ministry of Commerce Industry, Government of India. 2.1.43 Sweat Equity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian companies on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels. 3.1.3 OCBs have been derecognized as a class of investors in India with effect from September 16, 2003. Erstwhile OCBs which are incorporated outside India and are not under the adverse notice of RBI can make fresh investments under FDI Policy as incorporated non-resident entities, with the prior approval of Government of India if the investment is through Government route; and with the prior approval of RBI if the investment is through Automatic route. 3.1.4 A company, trust and partnership firm incorporated outside India and owned and controlled by NRIs can invest in India with the special dispensation as available to NRIs under the FDI Policy. 3.1.5 (i) Foreign Institutional Investor (FII) and Foreign Portfolio Investors (FPI) may in terms of Schedule 2 and 2A of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations, as the case may be, respectively, invest in the capital of an Indian company under the Portfolio Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng arrangement) or units issued by a VCF or by a Category-I AIF either through purchase by private arrangement either from the issuer of the security or from any other person holding the security or on a recognised stock exchange.It may also set up a domestic asset management company to manage its investments. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident entities, in other companies, subject to FDI Policy and FEMA regulations. 3.1.8 A Non- Resident Indian may subscribe to National Pension System governed and administered by Pension Fund Regulatory and Development Authority (PFRDA), provided such subscriptions are made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act. The annuity/ accumulated saving will be repatriable. 3.2 Eligible investee entities 3.2.1 FDI in an Indian Company Indian companies can issue capital against FDI. 3.2.2 FDI in Partnership Firm/Proprietary Concern (i) A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside India can invest in the capital of a firm or a proprietary concern in India on non-repatriation basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AIFs) governed by the SEBI (AIFs) Regulations, 2012 and notified under Schedule 11 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 is permitted to receive foreign investment from a person resident outside India (other than an individual who is citizen of or any other entity which is registered / incorporated in Pakistan or Bangladesh), including an Registered Foreign Portfolio Investor (RFPI) or a non-resident Indian (NRI). 3.2.6 FDI in other Entities FDI in resident entities other than those mentioned above is not permitted. 3.3 Instruments of investments, issue/transfer of shares etc. Types of instruments for investment and provisions relating to issue/ transfer of shares are given at Annexure 2 Annexure 3 respectively. Further, specific conditions of compliance for certain cases are given in Annexure-4. 3.4 Entry Routes for Investment 3.4.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by residents. (vii) A company, trust and partnership firm incorporated outside India and owned and controlled by non-resident Indians will be eligible for investments under Schedule 4 of FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations and such investment will also be deemed domestic investment at par with the investment made by residents. 3.5 Caps on Investments 3.5.1 Investments can be made by non-residents in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of this Circular. 3.6 Entry Conditions on Investment 3.6.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this Circular. 3.7 Other Conditions on Investment besides Entry Conditions 3.7.1 Besides the entry conditions on foreign investment, the investment/investors are required to comply with all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the relevant sectoral conditions on entry route, conditionalities and caps. 3.8.4 Downstream investment by an eligible Indian entity which is not owned and/or controlled by resident entity/ies 3.8.4.1 Downstream investment by an eligible Indian entity, which is not owned and/or controlled by resident entity/ies, into another Indian company, would be in accordance/compliance with the relevant sectoral conditions on entry route, conditionalities and caps, with regard to the sectors in which the latter Indian company is operating. Note: Downstream investment/s made by a banking company, as defined in clause(c) of Section 5 of the Banking Regulation Act, 1949, incorporated in India, which is owned and/or controlled by non-residents/a non-resident entity/non-resident entities, under Corporate Debt Restructuring (CDR), or other loan restructuring mechanism, or in trading books, or for acquisition of shares due to defaults in loans, shall not count towards indirect foreign investment. However, their 'strategic downstream investment' shall count towards indirect foreign investment. For this purpose, 'strategic downstream investments' would mean investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vels of Approvals for Cases under Government Route 4.2.1 The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow of and below ₹ 5000 crore. 4.2.2 The recommendations of FIPB on proposals with total foreign equity inflow of more than ₹ 5000 crore would be placed for consideration of Cabinet Committee on Economic Affairs (CCEA). 4.2.3 The CCEA would also consider the proposals which may be referred to it by the FIPB/the Minister of Finance (in-charge of FIPB). 4.3 Cases which do not require Fresh Approval 4.3.1 Companies may not require fresh prior approval of the Government i.e. Minister-in-charge of FIPB/CCEA for bringing in additional foreign investment into the same entity, in the following cases: (i) Entities the activities of which had earlier required prior approval of FIPB/Cabinet Committee on Foreign Investment (CCFI)/CCEA and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route; (ii) Entities the activities of which had se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security and other conditionalities. In sectors/activities not listed below, FDI is permitted up to100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. Wherever there is a requirement of minimum capitalization, it shall include share premium received along with the face value of the share, only when it is received by the company upon issue of the shares to the non-resident investor. Amount paid by the transferee during post-issue transfer of shares beyond the issue price of the share, cannot be taken into account while calculating minimum capitalization requirement. b) Sectoral cap i.e. the maximum amount which can be invested by foreign investors in an entity, unless provided otherwise, is composite and includes all types of foreign investments, direct and indirect, regardless of whether the said investments have been made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI), 6 (FVCI), 9 (LLPs), 10 (DRs) and 11(Investment Vehicle) of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. FCCBs and DRs having underlying of instruments which can be issued under Schedule 5, being in the nature of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Note: Besides the above, FDI is not allowed in any other agricultural sector/activity 100% Automatic 5.2.1.1 Other Conditions I. The term under controlled conditions covers the following: (i) Cultivation under controlled conditions for the categories of floriculture, horticulture, cultivation of vegetables and mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and culture medium are controlled artificially. Control in these parameters may be effected through protected cultivation under green houses, net houses, poly houses or any other improved infrastructure facilities where micro-climatic conditions are regulated anthropogenically. (ii) In case of Animal Husbandry, scope of the term under controlled conditions covers- (a)Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will require climate systems (ventilation, temperature/humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems as prescribed by the National Livestock Policy, 2013 and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing. 100% Automatic 5.2.3.3 Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities 5.2.3.3.1 Mining and mineral separation of titanium bearing minerals ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957). 100% Government 5.2.3.3.2 Other Conditions (i) FDI for separation of titanium bearing minerals ores will be subject to the following additional conditions viz.: (A) value addition facilities are set up within India along with transfer of technology; (B) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty/ FDI Cap Entry Route 5.2.6.1 Defence Industry subject to Industrial license under the Industries (Development Regulation) Act, 1951 49% Automatic up to 49% Above 49% under Government route on case to case basis, wherever it is likely to result in access to modern and state-of-art technology in the country. 5.2.6.2 Other Conditions (i) Infusion of fresh foreign investment within the permitted automatic route level, in a company not seeking industrial license, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require Government approval. (ii) Licence applications will be considered and licences given by the Department of Industrial Policy Promotion, Ministry of Commerce Industry, in consultation with Ministry of Defence and Ministry of External Affairs. (iii) Foreign investment in the sector is subject to security clearance and guidelines of the M/o Defence. (v) Investee company should be structured to be self-sufficient in areas of product design and development. The investee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions of foreign magazines dealing with news and current affairs 26% Government 5.2.8.2.1 Other Conditions (i) Magazine , for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing public news or comments on public news. (ii) Foreign investment would also be subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and current affairs issued by the Ministry of Information Broadcasting on 4.12.2008. Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.8.3 Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. 100% Government 5.2.8.4 Publication of facsimile edition of foreign newspapers 100% Government 5.2.8.4.1 Other C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Services, Maintenance and Repair organizations; Flying training institutes; and Technical training institutions. For the purposes of the Civil Aviation sector: (i) Airport means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of section 2 of the Aircraft Act, 1934; (ii) Aerodrome means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers and other structures thereon or pertaining thereto; (iii) Air transport service means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or series of flights; (iv) Air Transport Undertaking means an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward; (v) Aircraft component means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be granted only to a company: a) that is registered and has its principal place of business within India; b) the Chairman and at least two-thirds of the Directors of which are citizens of India; and c) the substantial ownership and effective control of which is vested in Indian nationals. (v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security view point before deployment; and (vi)All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation. Note: (i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above, are applicable in the situation where there is no investment by foreign airlines. (ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c)(ii) above. (iii) The policy mentioned at para (c) above is not applicable to M/s Air India Limited. 5.2.10 Construction Development: Townships, Housing, Built-up Infrastr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal Body concerned. (E) The State Government/Municipal/Local Body concerned, which approves the building/development plans, will monitor compliance of the above conditions by the developer. Note: (i) It is clarified that FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights (TDRs). Real estate business means dealing in land and immovable property with a view to earning profit there from and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. Further, earning of rent/ income on lease of the property, not amounting to transfer, will not amount to real estate business. (ii) Condition of lock-in period at (A) above will not apply to Hotels Tourist Resorts, Hospitals, Special Economic Zones (SEZs), Educational Institutions, Old Age Homes and investment by NRIs. (iii) Completion of the project will be determined as per the local bye-laws/rules and other regulations of State Governments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to time. (2) For the purposes of FDI policy on the sector, terms Private Security Agencies , Private Security and Armoured Car Service will have the same meaning as provided under PSAR Act, 2005, which is reproduced as under: Private Security Agency means a person or body of persons other than a government agency, department or organisation engaged in the business of providing private security services including training to private security guards or their supervisor or providing private security guards to any industrial or business undertaking or a company or any other person or property; Private Security means security provided by a person, other than a public servant, to protect or guard any person or property or both and includes provision of armoured car service; Armoured Car Service means the service provided by deployment of armed guards along with armoured car and such other related services which may be notified by the Central Government or as the case may be, the State Government from time to time. 5.2.14 Telecom Services Sector/Activity % of Equity/ FDI Cap Entry Route ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Body/Government Authority/Local Self-Government Body under that State Government should be obtained. (b) Except in case of sales to Government, sales made by the wholesaler would be considered as cash carry wholesale trading/wholesale trading with valid business customers, only when WT are made to the following entities: (I) Entities holding sales tax/ VAT registration/service tax/excise duty registration; or (II) Entities holding trade licenses i.e. a license/registration certificate/membership certificate/registration under Shops and Establishment Act, issued by a Government Authority/Government Body/Local Self-Government Authority, reflecting that the entity/person holding the license/ registration certificate/ membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or (III) Entities holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities/Local Self Government Bodies; or (IV) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self consumption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of e-commerce means providing of an information technology platform by an e-commerce entity on a digital electronic network to act as a facilitator between buyer and seller. 5.2.15.2.3 Guidelines for Foreign Direct Investment on e-commerce sector i) 100% FDI under automatic route is permitted in marketplace model of e-commerce. ii) FDI is not permitted in inventory based model of e-commerce. 5.2.15.2.4 Other Conditions i) Digital electronic network will include network of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles etc. ii) Marketplace e-commerce entity will be permitted to enter into transactions with sellers registered on its platform on B2B basis. iii) E-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfillment, call centre, payment collection and other services. iv) E-commerce entity providing a marketplace will not exercise ownership over the inventory i.e. goods purported to be sold. Such an ownership over the inventory will render the business into inventory based model. v) An e-commerce entity wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted to undertake single brand product retail trading in the country for the specific brand, directly or through a legally tenable agreement with the brand owner for undertaking single brand product retail trading. The onus for ensuring compliance with this condition will rest with the Indian entity carrying out single-brand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with the above condition. The requisite evidence should be filed with the RBI for the automatic route and SIA/FIPB for cases involving approval. (e) In respect of proposals involving foreign investment beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts which the company will be required to maintain. This procurement requirement would have to be me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rading of products having state-of-art and cutting-edge technology and where local sourcing is not possible. 5.2.15.4 Multi Brand Retail Trading Sector/Activity % of Equity/ FDI Cap Entry Route Multi Brand Retail Trading 51% Government (1) FDI in multi brand retail trading, in all products, will be permitted, subject to the following conditions: (i) Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. (ii) Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million. (iii) At least 50% of total FDI brought in the first tranche of US $ 100 million, shall be invested in 'back-end infrastructure' within three years, where back-end infrastructure will include capital expenditure on all activities, excluding that on front-end units; for instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy. The list of States/Union Territories which have conveyed their agreement is at (2) below. Such agreement, in future, to permit establishment of retail outlets under this policy, would be conveyed to the Government of India through the Department of Industrial Policy Promotion and additions would be made to the list at (2) below accordingly. The establishment of the retail sales outlets will be in compliance of applicable State/Union Territory laws/ regulations, such as the Shops and Establishments Act etc. (ix) Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of multi-brand retail trading. (x) Applications would be processed in the Department of Industrial Policy Promotion, to determine whether the proposed investment satisfies the notified guidelines, before being considered by the FIPB for Government approval. (2) List of States/Union Territories as mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn investment in other financial services, other than those indicated below, would require prior approval of the Government. 5.2.17 Asset Reconstruction Companies Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.17.1 Asset Reconstruction Company (ARC) means a company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). 100% Automatic 5.2.17.2 Other Conditions (i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank of India, up to 100% on the automatic route. (ii) Investment limit of a sponsor in the shareholding of an ARC will be governed by the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time. Similarly, investment by institutional / non-institutional investors will also be governed by the said Act, as amended from time to time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of Equity/ FDI Cap Entry Route 5.2.20.1 Credit Information Companies 100% Automatic 5.2.20.2 Other Conditions (1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005. (2) Foreign investment is permitted subject to regulatory clearance from RBI. (3) Such FII/FPI investment would be permitted subject to the conditions that: (a) A single entity should directly or indirectly hold below 10% equity. (b) Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement; and (c) FIIs/FPIs investing in CICs shall not seek a representation on the Board of Directors based upon their shareholding. 5.2.21 Infrastructure Company in the Securities Market Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.21.1 Infrastructure companies in Securities Markets, namely, stock exchanges, commodity exchanges, depositories and clearing corporations, in compliance with SEBI Regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) 49% Automatic 5.2.22.2 Other Conditions (a) No Indian Insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed forty-nine percent of the paid up equity capital of such Indian Insurance company. (b) The foreign investment up to forty-nine percent of the total paid-up equity of the Indian Insurance Company shall be allowed on the automatic route subject to approval/verification by the Insurance Regulatory and Development Authority of India. (c) Foreign investment in this sector shall be subject to compliance with the provisions of the Insurance Act, 1938 and the condition that Companies receiving FDI shall obtain necessary license /approval from the Insurance Regulatory Development Authority of India for undertaking insurance and related activities. (d) An Indian Insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities as determined by Department of Financial Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Automatic Other Conditions (i) Foreign investment in the Pension Funds is allowed as per the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013. (ii) Foreign Investment in Pension Funds will be subject to the condition that entities bringing in foreign equity investment as per Section 24 of the PFRDA Act shall obtain necessary registration from the Pension Fund Regulatory and Development Authority and comply with other requirements as per the PFRDA Act, 2013 and Rules and Regulations framed under it for so participating in Pension Fund Management activities in India. (iii) Wherever such foreign equity investment involves control or ownership by the foreign investor or, transfer of control or ownership of an existing pension fund from resident Indian citizens and/ or Indian companies owned and controlled by resident Indian citizens to such foreign investing entities as a consequence of the investment, including through transfer of shares and or fresh issue of shares to Non-Resident entities through acquisition, amalgamation, merger etc., it would require Government approval in consultation with the Department of Financial S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock Broking (vii) Asset Management (viii) Venture Capital (ix) Custodian Services (x) Factoring (xi) Credit Rating Agencies (xii) Leasing Finance (xiii) Housing Finance (xiv) Forex Broking (xv) Credit Card Business (xvi) Money Changing Business (xvii) Micro Credit (xviii) Rural Credit 100% Automatic 5.2.26.2 Other Conditions (1) Investment would be subject to the following minimum capitalisation norms: (i) US $ 0.5 million for foreign capital up to 51% to be brought upfront. (ii) US $ 5 million for foreign capital more than 51% and up to 75% to be brought upfront. (iii) US $ 50 million for foreign capital more than 75% out of which US $ 7.5 million to be brought upfront and the balance in 24 months. (iv)NBFCs (i) having foreign investment more than 75% and up to 100%, and (ii) with a minimum capitalisation of US $ 50 million, can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital. The minimum capitalization condition as mandated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of medical devices. The above mentioned conditions will, therefore, not be applicable to greenfield as well as brownfield projects of this industry. ii. Medical device means- a. any instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including the software, intended by its manufacturer to be used specially for human beings or animals for one or more of the specific purposes of- (aa)diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder; (ab) diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or handicap; (ac) investigation, replacement or modification or support of the anatomy or of a physiological process; (ad) supporting or sustaining life; (ae) disinfection of medical devices; (af) control of conception, and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or immunological or metabolic means, but which may be assisted in its intended function by such means; b. an accessory to such an instrument, apparatus, appliance, material or other article; c. a device which is reage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable) Existing company / New company (Brownfield) ( Greenfield) If existing company, give registration number allotted by RBI for FDI, if any 2. Description of the main business activity NIC Code Location of the project and NIC code for the district where the project is located City, District and State Code for District Code for State Percentage of FDI allowed as per FDI policy (Sectoral cap under FDI Policy) State whether FDI is allowed under Automatic Route or Approval Route (strike out whichever is not applicable) (If under approval route, give SIA/FIPB approval No. with date) Automatic Route / Approval Route 3 Details of the foreign investor / collaborator 2 * (Details of foreign residence to be given. Indian address if any should not be given) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 ESOPs 09 Share Swap 10 Others (please specify) Total B Type of security issued No. Nature of Security Number Maturity Face value Premium Issue Price per security Amount of inflow* 01 Equity 02 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of a share as on date of the issue is* We are an un-listed company and the fair value of a share is* ** before issue of shares *(Please indicate as applicable) 5. Post issue pattern of shareholding Equity Compulsorily convertible Preference Shares/ Debentures/others Investor category No. of Amount (Face % No. of Amount (Face % a) Non-Resident 01 Individuals 02 Companies 03 FIIs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s laid down under the FDI scheme as indicated in Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time. 2. The investment is within the sectoral cap / statutory ceiling permissible under the Automatic Route of RBI and we fulfil all the conditions laid down for investments under the Automatic Route namely (strike off whichever is not applicable). a) Shares issued on rights basis to non-residents are in conformity with Regulation 6 of the RBI Notification No FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time. OR b) Shares issued are bonus. OR c)Shares have been issued under a scheme of merger and amalgamation of two or more Indian companies or reconstruction by way of de-merger or otherwise of an Indian company, duly approved by a court in India. OR d)Shares are issued under ESOP and the conditions regarding this issue have been satisfied 3. Shares have been issued in terms of SIA /FIPB approval No.___________________ dated _______________ 4 The foreign investment received and reported now will be utilized in compliance with the provision of a Prevention of Money Laundering Act 2002 (PMLA) and Unlawful Acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1956 have been complied with. 2. Terms and conditions of the Government approval, if any, have been complied with. 3. The company is eligible to issue shares / convertible debentures/others under these Regulations. 4. The company has all original certificates issued by AD Category I banks in India, evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. (Name Signature of the Company Secretary) (Seal) FOR USE OF THE RESERVE BANK ONLY: Registration Number for the FC-GPR: Unique Identification Number allotted to the Company at the time of reporting receipt of remittance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing maturity. 3. The inward remittance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. 4. Acquisition of Warrants and Partly Paid Shares - An Indian company may issue warrants and partly paid shares to a person resident outside India subject to terms and conditions as stipulated by the Reserve Bank of India in this behalf, from time to time. 5. Issue of Foreign Currency Convertible Bonds (FCCBs) and Depository Receipts(DRs) a) FCCBs/DRs may be issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and DR Scheme 2014 respectively, as per the guidelines issued by the Government of India there under from time to time. b) DRs are foreign currency denominated instruments issued by a foreign Depository in a permissible jurisdiction against a pool of permissible securities issued or transferred to that foreign depository and deposited with a domestic custodian. c) In terms of Notification No. FEMA.20/2000-RB dated May 3, 2000 as amended from time to time, a person will be eligible to issue or transfer eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conversion into ADRs/GDRs. Annexure-3 Provisions Relating to Issue/ Transfer of Shares 1. The capital instruments should be issued within 180 days from the date of receipt of the inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NRE/FCNR (B) account of the non-resident investor. In case, the capital instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and would attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the RBI, on the merits of the case. 2. Issue price of shares Price of shares issued to persons resident outside India under the FDI Policy, shall not be les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by them to another NRI. (c) A person resident outside India can transfer any security to a person resident in India by way of gift. (d) A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI. (e) A person resident in India can transfer by way of sale, shares/ convertible debentures (including transfer of subscriber s shares), of an Indian company under private arrangement to a person resident outside India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure. (f) General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure. (g) The above General Permission also covers transfer by a resident to a non-resident of shares/convertible debentures of an Indian company, engaged in an activity earlier covered under the Government Route but now falling under Automatic Rou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, towards payment of share purchase consideration and/or provide Escrow facilities for keeping securities to facilitate FDI transactions subject to the63terms and conditions specified by RBI. SEBI authorised Depository Participants have also been permitted to open and maintain, without prior approval of RBI, Escrow accounts for securities subject to the terms and conditions as specified by RBI. In both cases, the Escrow agent shall 63necessarily be an AD Category-I bank or SEBI authorised Depository Participant (in case of securities accounts). These facilities will be applicable for both issue of fresh shares to the non- residents as well as transfer of shares from/to the non- residents. 5. Prior permission of RBI in certain cases for transfer of capital instruments 5.1 Except cases mentioned in paragraph 5.2 below, the following cases require prior approval of RBI: (i) Transfer of capital instruments from resident to non-residents by way of sale where: (a) Transfer is at a price which falls outside the pricing guidelines specified by the Reserve Bank from time to time and the transaction does not fall under the exception given in para 5.2. (b) Transfer of cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding, block deals, delisting, exit, open offer/substantial acquisition/SEBI SAST, buy back); and iii. Chartered Accountants Certificate to the effect that compliance with the relevant SEBI regulations/guidelines as indicated above is attached to the form FC-TRS to be filed with the AD bank. B. Transfer of shares from Resident to Non-Resident: i) where the transfer of shares requires the prior approval of the Government conveyed through FIPB as per the extant FDI policy provided that: a) the requisite approval of the FIPB has been obtained; and b) the transfer of shares adheres with the pricing guidelines and documentation requirements as specified by the Reserve Bank of India from time to time. ii) where the transfer of shares attract SEBI (SAST) Regulations subject to the adherence with the pricing guidelines and documentation requirements as specified by Reserve Bank of India from time to time. iii) where the transfer of shares does not meet the pricing guidelines under the FEMA, 1999 provided that: a) The resultant FDI is in compliance with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remittance of which does not require prior permission of the Government of India or Reserve Bank of India under FEMA, 1999 or any rules/ regulations framed or directions issued thereunder is permitted, provided that: (I) The equity shares shall be issued in accordance with the extant FDI guidelines on sectoral caps, pricing guidelines etc. as amended by Reserve bank of India, from time to time; Explanation: Issue of shares/convertible debentures that require Government approval in terms of paragraph 3 of Schedule 1 of FEMA 20 or import dues deemed as ECB or trade credit or payable against import of second hand machinery shall continue to be dealt in accordance with extant guidelines; (II)The issue of equity shares under this provision shall be subject to tax laws as applicable to the funds payable and the conversion to equity should be net of applicable taxes. (iii) Issue of equity shares under the FDI policy is allowed under the Government route for the following: (I) import of capital goods/ machinery/ equipment (excluding second-hand machinery), subject to compliance with the following conditions: (a)Any import of capital goods/machinery etc., made by a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment by a person resident in India to a person resident outside India. ii. Transfer of shares by way of sale under private arrangement by a person resident outside India to a person resident in India. iii. Exit by non-resident investor on exercising option/right in shares or compulsorily mandatorily convertible preference shares or fully, compulsorily mandatorily convertible debentures. 2.2 Transfer by Resident to Non-resident (i.e. to foreign national, NRI, FII, FPI and incorporated non-resident entity other than erstwhile OCB) Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: (a) listed on a recognized stock exchange in India ,shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines , as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares, (b) not listed on a recognized stock exchange in India, shall not be less than the fair value to be determined by a SEBI registered Merchant Banker or a Chartered Accountant as per any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts and if the shares sold were held on non repatriation basis, the sale proceeds may be credited to his NRO account subject to payment of taxes. 4.3 The sale proceeds of shares (net of taxes) sold by an OCB may be remitted outside India directly if the shares were held on repatriation basis and if the shares sold were held on non-repatriation basis, the sale proceeds may be credited to its NRO (Current) Account subject to payment of taxes, except in the case of OCBs whose accounts have been blocked by Reserve Bank. 5. Documentation Besides obtaining a declaration in the enclosed Form FC-TRS (in quadruplicate), the AD branch should arrange to obtain and keep on record the following documents: 5.1 For sale of shares by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent indicating the details of transfer i.e. number of shares to be transferred, the name of the investee company whose shares are being transferred and the price at which shares are being transferred. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record. ii. Where Consent Letter has been sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted 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 timeframe would be on the transferor / transferee, resident in India. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Forms and submit a monthly report to the Reserve Bank 5 . For the purpose the Authorized Dealers may designate branches to specifically handle such transactions. These branches could be staffed with adequately trained staff for this purpose to ensure that the transactions are put through smoothly. The ADs may also designate a nodal office to coordinate the work at these branches and also ensure the reporting of these transactions to the Reserve Bank. 6.2 When the transfer is on private arrangement basis, on settlement of the transactions, the transferee/his duly appointed agent should approach the investee company to record the transfer in their books along with the certificate in the Form FC-TRS from the AD branch that the remittances have been received by the transferor/payment has been made by the transferee. On receipt of the certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties according to the guidelines issued by Securities Exchange Board of India or as per any internationally accepted pricing methodology on arm s length basis for listed companies and unlisted companies, respectively. vii. Certificate from the concerned Indian company certifying that the proposed transfer of shares/convertible debentures by way of gift from resident to the non-resident shall not breach the applicable sectoral cap/ FDI limit in the company and that the proposed number of shares/convertible debentures to be held by the non-resident transferee shall not exceed 5 per cent of the paid up capital of the company. viii. An undertaking from the resident transferor that the value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 50,000during a financial year*. *RBI s A.P. (DIR Series) Circular No. 14 Dated 15.09.2011 ix. A declaration from the donee accepting partly paid shares or warrants that donee is aware of the liability as regards calls in arrear and consequences thereof. SECTION 3 Definition of relative as giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toral cap. 4. Acquisition of shares under Scheme of Merger/Demerger/Amalgamation Mergers/demergers/ amalgamations of companies in India are usually governed by an order issued by a competent Court on the basis of the Scheme submitted by the companies undergoing merger/demerger/amalgamation. Once the scheme of merger or demerger or amalgamation of two or more Indian companies has been approved by a Court in India, the transferee company or new company is allowed to issue shares to the shareholders of the transferor company resident outside India, subject to the conditions that: (i) the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the sectoral cap, and (ii) the transferor company or the transferee or the new company is not engaged in activities which are prohibited under the FDI policy. Note: FIPB approval would not be required in case of mergers and acquisitions taking place in sectors under automatic route. 4.1 Issue of Non convertible/redeemable bonus preference shares or debentures Indian companies are allowed to issue non-convertible/redeemable preference shares or debentures to non-resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is required for investment in automatic route sectors by way of swap of shares. 7. Pledge of Shares (A) A person being a promoter of a company registered in India (borrowing company), which has raised external commercial borrowings, may pledge the shares of the borrowing company or that of its associate resident companies for the purpose of securing the ECB raised by the borrowing company, provided that a no objection for the same is obtained from a bank which is an authorised dealer. The authorized dealer, shall issue the no objection for such a pledge after having satisfied itself that the external commercial borrowing is in line with the extant FEMA regulations for ECBs and that: i) the loan agreement has been signed by both the lender and the borrower, ii) there exists a security clause in the Loan Agreement requiring the borrower to create charge on financial securities, and iii) the borrower has obtained Loan Registration Number (LRN) from the Reserve Bank: and the said pledge would be subject to the following conditions: a) the period of such pledge shall be co-terminus with the maturity of the underlying ECB; b) in case of invocation of pledge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such an Indian company would have indirect foreign investment if the Indian investing company has foreign investment in it. The indirect investment can also be a cascading investment i.e. through multi-layered structure. 1.1 For the purpose of computation of indirect foreign investment in an Indian company, foreign investment in an Indian company shall include all types of foreign investments i.e. FDI; investment by FIIs (holding as on March 31), FPIs (holding as on March 31); NRIs; ADRs; GDRs; Foreign Currency Convertible Debentures (FCCBs); Investment Vehicles fully, compulsorily and mandatorily convertible preference shares and fully, compulsorily and mandatorily convertible Debentures or units of an Investment Vehicle, regardless of whether the said investments have been made under Schedule 1, 2, 2A, 3, 6, 9, 10 and 11 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000. 1.2 Guidelines for calculation of total foreign investment i.e. direct and indirect foreign investment (i) Counting of direct foreign investment All investment directly by a non-resident entity into the Indian company/ LLP would be counted towards foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y X; (II) invests 80% in Company X, the indirect foreign investment in Company X would be taken as 80%; (III) where Company X is a wholly owned subsidiary of Company Y (i.e. Company Y owns 100% shares of Company X), then only 75% would be treated as indirect foreign equity and the balance 25% would be treated as resident held equity. The indirect foreign equity in Company X would be computed in the ratio of 75:25 in the total investment of Company Y in Company X. (iii) The total foreign investment would be the sum total of direct and indirect foreign investment. (iv) The above methodology of calculation would apply at every stage of investment in Indian companies and thus to each and every Indian company. (v) Additional conditions (a) The full details about the foreign investment including ownership details etc. in Indian company(s) and information about the control of the company(s) would be furnished by the Company(s) to the Government of India at the time of seeking approval. (b) In any sector/activity, where Government approval is required for foreign investment and in cases where there are any inter-se agreements between/amongst shareholders which have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is made by persons as per section 187C of the Companies Act,1956 or section 89 of the Companies Act, 2013, as the case may be about a beneficial interest being held by a non-resident entity, then even though the investment may be made by a resident Indian citizen, the same shall be counted as foreign investment. 1.3 The above mentioned policy and methodology would be applicable for determining the total foreign investment in all sectors, except in sectors where it is specified in a statute or rule there under. The above methodology of determining direct and indirect foreign investment therefore does not apply to the Insurance Sector which will continue to be governed by the relevant Regulation. Similarly, above methodology will also not apply to downstream investments by an Investment Vehicle. Relevant conditions of downstream investment by Investment Vehicles are as under: (i) Downstream investment by an Investment Vehicle shall be regarded as foreign investment if either the Sponsor or the Manager or the Investment Manager is not Indian owned and controlled as defined in Regulation 14 of the principal Regulations as defined in RBI Notification No. 362/2015-RB dated Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up/Liquidation of Companies: (i) Sale proceeds of shares and securities and their remittance is remittance of asset governed by The Foreign Exchange Management (Remittance of Assets) Regulations, 2000 under FEMA. (ii) AD Category-I bank can allow the remittance of sale proceeds of a security (net of applicable taxes) to the seller of shares resident outside India, provided the security has been held on repatriation basis, the sale of security has been made in accordance with the prescribed guidelines and NOC/tax clearance certificate from the Income Tax Department has been produced. (iii) Remittance on winding up/liquidation of Companies AD Category-I banks have been allowed to remit winding up proceeds of companies in India, which are under liquidation, subject to payment of applicable taxes. Liquidation may be subject to any order issued by the court winding up the company or the official liquidator in case of voluntary winding up under the provisions of the Companies Act, , as applicable. AD Category-I banks shall allow the remittance provided the applicant submits: a. No objection or Tax clearance certificate from Income Tax Department for the remittance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing bonus and shares issued on rights basis and shares issued under ESOP)/fully, mandatorily compulsorily convertible debentures/fully, mandatorily compulsorily convertible preference shares, the Indian company has to file Form FC-GPR, not later than 30 days from the date of issue of shares. (ii) Form FC-GPR has to be duly filled up and signed by Managing Director/Director/Secretary of the Company and submitted to the Authorized Dealer of the company, who will forward it to the Reserve Bank. The following documents have to be submitted along with the form: (a) A certificate from the Company Secretary of the company certifying that: (A) all the requirements of the Companies Act, as applicable, have been complied with; (B) terms and conditions of the Government of India approval, if any, have been complied with; (C) the company is eligible to issue shares under these Regulations; and (D) the company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration. Note: For companies with paid up capital with less than ₹ 5 crore, the above mentioned certificate can be given by a practicing company secre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would consolidate the Form FC-TRS and submit a monthly report to the Reserve Bank. 2.4 Reporting of Non-Cash Details of issue of shares against conversion of ECB have to be reported to the Regional Office concerned of the RBI, as indicated below: (i) In case of full conversion of ECB into equity, the company shall report the conversion in Form FC-GPR to the Regional Office concerned of the Reserve Bank as well as in Form ECB-2 to the Department of Statistics and Information Management (DSIM), Reserve Bank of India, Bandra-Kurla Complex, Mumbai- 400 051, within seven working days from the close of month to which it relates. The words ECB wholly converted to equity shall be clearly indicated on top of the Form ECB-2. Once reported, filing of Form ECB-2 in the subsequent months is not necessary. (ii) In case of partial conversion of ECB, the company shall report the converted portion in Form FC-GPR to the Regional Office concerned as well as in Form ECB-2 clearly differentiating the converted portion from the non-converted portion. The words ECB partially converted to equity shall be indicated on top of the Form ECB-2. In the subsequent months, the outstanding balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated to the Central Government. 3.2 Adjudication and Appeals (i) For the purpose of adjudication of any contravention of FEMA, the Ministry of Finance as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 appoints officers of the Central Government as the Adjudicating Authorities for holding an enquiry in the manner prescribed. A reasonable opportunity has to be given to the person alleged to have committed contraventions against whom a complaint has been made for being heard before imposing any penalty. (ii) The Central Government may appoint as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, an Appellate Authority/ Appellate Tribunal to hear appeals against the orders of the adjudicating authority. 3.3 Compounding Proceedings Under the Foreign Exchange (Compounding Proceedings) Rules 2000, the Central Government may appoint Compounding Authority an officer either from Enforcement Directorate or Reserve Bank of India for any person contravening any provisions of the FEMA. The Compounding Authorities are authorized to compound the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Telephone e-mail 2 Details of the foreign investor/ collaborator Name Address Country 3. Date of receipt of funds 4. Amount In foreign currency In Indian Rupees 5. Whether investment is under Automatic Route or Approval Route If Approval Route, give details (ref. no. of approval and date) Automatic Route / Approval Route 6 Name of the AD through whom the remittance is received 7. Address of the AD A Copy of the FIRC evidencing the receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I (Identification Particulars) 1.Name and Address of the Indian Company: Name of the Company: _______________________________ Address: _______________________________________________________ City: State: Pin: 2.PAN Number of Company given by Income Tax Department (10digit) 3. CIN Number allotted by Ministry of Corp.Affairs,Govt.ofIndia (21digit) 4. Contact Details Contact Person Name: Designation: Telephone No: Fax: e-mail: RP51Q sWeb-Site(ifany): 5.Account closing date (DD/MM/YYYY) 6.NatureofBusiness: ___________________________________________________ (AsperNationalIndustrial Classification(NIC)2008Code) 7. Whether your Company Name has changed during the last financial year(April-March) (Y/N) ? If yes,please specify the Company's ol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2) 1.1TotalEquity Participating Preference Share capital (=1.1(a)+ 1.1(b)) (a)Ordinary/Equity Share* (b) Participating Preference Share 1.2 Non-participating Preference Share# 2.0 Non-resident Holdings(at face value in Rs lakh) 2.1 Equity Participating Preference share capital(Sumofitem-1toitem-12) 1 Individuals 2 Companies 3 Foreign Institutional Investors (FIIs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4 Taxon Dividend (if any) 3.5 Retained Profit (=3.2-3.3-3.4) Block1C: Reserves Surplus (from Balance Sheet) Item Amount in Rs lakh as at the Previous March Latest March 4.1 Reserves (Excluding Profit and Loss account balance) 4.2 Profit(+) and Loss(-) account balance 4.3 Reserve and Surplus (=4.1+ 4.2) 4.4 Net worth of Company(= 1.1+ 4.3) Block1D: Sales and Purchase made during the reference year Note: To be filled in by company where single foreign direct investor holding is more than 50% in total equity(i.e. If reporting Indian company is subsidiary of Foreign company). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investor 1.2 Claims on Direct Investor 2.0 Other Capital # 2..1 Liabilities to Direct Investor 2.2 Claims on Direct Investor Note : (i)If the information is to be furnished for more than one invest or,then add separate Block with same format (ii):Other capital,item 2.1 2.2 of Block-2A includes all other liabilities and claims at Nominal value,except equity and participating preference shares,(i.e.trade credit,loan,debentures, Non-participating share capital,other accounts receivable and payables etc.)of Indian reporting company with its director investor indicated inBlock-2A. Block2B: Investment in India under Foreign Direct Investment(FDI)schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Portfolio Investment Equity Participating Preference share capital holding percent as at the end of latest year(%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Securities (at Market Value) 2.0 Debt Securities (=2.1+2.2) 2.1 Money Market Instruments (original maturity upto1year) 2.2 Bonds and Other instruments (original maturity more than 1 year) Please ensure that Non-resident Equity Participating Preference share capital mentioned at item 2.1 of block1(A) should be reported in either Block-2A or Block-2B or Block-2C at Market Value i.e. sum of equity% in Block-2A,Block-2B Block-2C must be equal to the item 3.0 of Block-1A for the latest march. Section IV (FOREIGN ASSETS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme,in each of which your company hold10%or more equity shares on the reference date. Name of the non-resident DIE Country of Type of Capital non-resident DIE Equity holding per Cent as at the end of latest year(%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Capital (=1.1-1.2) 1.1 Claims on Direct Investment Enterprise 1.2 Liabilities to Direct Investment Enterprise (Reverse investment) 2.0 OtherCapital (=2.1-2.2) # 2.1 Claims on Direct Investment Enterprise 2.2 Liabilities to Direct Investment Enterprise Note: (i) If the informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ententerprises, other than those made under ODI scheme reported in Block-4. Portfolio Investment Country of non-resident enterprise Amount in Rslakh as at the end of Previous March Latest March 1.0 Equity Securities (at Market Value) 2.0 Debt Securities (=2.1+2.2) 2.1 Money Market Instruments (original maturity upto 1 year) 2.2 Bonds and Other instruments (original maturity more than 1 year) Note: (i) Country wise consolidated information pertaining to each type of investment should be reported separately. (ii) If the information is to be furnish for more than one country, then use the ADD Block 5 with the same format. Section IV-A Outward Foreign Affiliates Trade Statistics (Outward FATS) Please provide the amount in foreign currency (in actual) in all blocks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Stamp of the Company SECTION-4 Form FC-TRS Declaration regarding transfer of shares / compulsorily and mandatorily convertible preference shares (CMCPS) / debentures /others by way of sale from resident to nonresident / non-resident to resident (to be submitted to the designated AD branch in quadruplicate within 60 days from the date of receipt of funds) The following documents are enclosed For sale of shares / compulsorily and mandatorily convertible preference shares / debentures / others by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document. ii. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India. iii. Certificate indicating fair value of shares from a Chartered Accountant. iv. Copy of Broker's note if sale is made on Stock Exchange. v. Declaration from the buyer to the effect that he is eligible to acquire shares / compulsoril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether 1. Individual 2. Company 3. FII 4. FVCI## 5. Foreign Trust 6. Private Equity Fund 7. Pension/ Provident Fund 8. Sovereign Wealth Fund (SWF*) 9. Partnership/ Proprietorship firm 10. Financial Institution 11. NRIs/PIOs 12. Othersi Date and Place of Incorporation Address of the seller (including e-mail, telephone Number Fax no) 6 Particulars of earlier Reserve Bank / FIPB approvals 7 Details regarding shares / compulsorily and mandatorily convertible preference shares (CMCPS) / debentures/ others (such as FDI compliant instruments like participating interest rights in oil fields, etc.) to be transferred Date of the transaction Number of shares CMCPS / debentures /others Face value in Rs. Negotiated Price for the transfer**in Rs. Amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lsorily and mandatorily convertible preference shares / compulsorily and mandatorily convertible debentures/ others from resident to non resident the declaration has to be signed by the non resident buyer, and in respect of the transfer of shares / compulsorily and mandatorily convertible preference shares / compulsorily and mandatorily convertible debentures/ other from non-resident to resident the declaration has to be signed by the non-resident seller. # The initial investment/s was/were made by FVCI under FDI Scheme in terms of Schedule 1 to Notification No. FEMA.20/2000-RB dated May 3, 2000 * SWF mean a Government investment vehicle which is funded by foreign exchange assets, and which manages those assets separately from the official reserves of monetary authorities. ## The initial investment/s was/were made by FVCI under FDI Scheme in terms of Schedule 1 to Notification No. FEMA.20/2000-RB dated May 3, 2000. Certificate by the AD Branch It is certified that the application is complete in all respects. The receipt / payment for the transaction are in accordance with FEMA Regulations / Reserve Bank guidelines. Signature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Transaction Name of the Company Activity NIC Code Name of the Seller Constitution Nature of Business of the Seller Name of the Buyer Constitution Nature of Business of the Buyer Name of Shares transferred Face value Sale Price per share Total inflow (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) SECTION-5 Form DRR Return to be filed by the Domestic Custodian who has arranged issue/transfer of Depository Receipts Instructions: The Form should be completed and submitted by the Domestic Custodian to the Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Mumbai. 1. Name of the Domestic Custodian : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Whether funds are kept abroad. If yes, name and address of the bank 16. Whether the DR is listed/traded on an International Exchange or trading platform. If so, details of the exchange/trading platform. Name of Stock Exchange Date of commencement of trading 17. The date on which DRs issue was launched Certified that all the conditions laid down by Government of India and Reserve Bank of India have been complied with. Sd/- Chartered Accountant Sd/- Authorised Signatory of the Company. 6 In terms of AP (DIR Series) Circular No 5 dated July 17, 2014, NIC 2008 codes may be reported Annexure-7 Conditions for Broadcasting Sector 1.0 FDI for Up-linking/Down-linking TV Channels will be subject to compliance with the relevant Up-linking/Down-linking Policy notified by the Ministry of Information Broadcasting from time to time. 1.1 Foreign investment (FI) in companies engaged in all the aforestated services wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultancy or in any other capacity for installation, maintenance, operation or any other services prior to their deployment. The security clearance shall be required to be obtained every two years. Permission vis- -vis Security Clearance (v) The permission shall be subject to permission holder/licensee remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn, the permission granted is liable to be terminated forthwith. (vi) In the event of security clearance of any of the persons associated with the permission holder/licensee or foreign personnel being denied or withdrawn for any reasons whatsoever, the permission holder/licensee will ensure that the concerned person resigns or his services terminated forthwith after receiving such directives from the Government, failing which the permission/license granted shall be revoked and the company shall be disqualified to hold any such Permission/license in future for a period of five years. Infrastructure/Network/Software related requirement (vii) The officers/officials of the licensee companies dealing with the lawful interception of services will be resident Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rized representative, such reports, accounts, estimates, returns or such other relevant information and at such periodic intervals or such times as may be required. (xvii)The service providers should familiarize/train designated officials or the Government or officials of TRAI or its authorized representative(s) in respect of relevant operations/features of their systems. National Security Conditions (xviii)It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security angle. The Government of India, Ministry of Information and Broadcasting shall have the right to temporarily suspend the permission of the permission holder/Licensee in public interest or for national security for such period or periods as it may direct. The company shall immediately comply with any directives issued in this regard failing which the permission issued shall be revoked and the company disqualified to hold any such permission in future for a period of five years. (xix)The company shall not import or utilize any equipment, which are identified as unlawful and/or render network security vulnerable. Other Conditions (x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectricity; gas and water supply; post and telecommunications; software publishing, consultancy and supply; data processing, database activities and distribution of electronic content; other computer related activities; basic and applied R D on bio-technology, pharmaceutical sciences/life sciences, natural sciences and engineering; business and management consultancy activities; and architectural, engineering and other technical activities. 1.2 FDI in Industrial Parks would not be subject to the conditionalities applicable for construction development projects etc. spelt out in para 5.2.10 of Chapter 5 of this Circular, provided the Industrial Parks meet with the under-mentioned conditions: (i) it would comprise of a minimum of 10 units and no single unit shall occupy more than 50% of the allocable area; (ii) the minimum percentage of the area to be allocated for industrial activity shall not be less than 66% of the total allocable area. Annexure-9 Permissible limits under portfolio investment schemes through stock exchanges for FIIs/FPIs and NRIs The permissible limits under portfolio investment schemes through stock exchanges for FIIs/FPIs and NRIs will be as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A foreign bank may operate in India through only one of the three channels viz., (i) branches (ii) a wholly-owned subsidiary and (iii) a subsidiary with aggregate foreign investment up to a maximum of 74 per cent in a private bank. (d) A foreign bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank will be permitted to establish a subsidiary through acquisition of shares of an existing private sector bank provided at least 26 per cent of the paid capital of the private sector bank is held by residents at all times consistent with para (i) (b) above. (e) A subsidiary of a foreign bank will be subject to the licensing requirements and conditions broadly consistent with those for new private sector banks. (f) Guidelines for setting up a wholly-owned subsidiary of a foreign bank will be issued separately by RBI. (g) All applications by a foreign bank for setting up a subsidiary or for conversion of their existing branches to subsidiary in India will have to be made to the RBI. (iii) At present there is a limit of ten per cent on voting rights in res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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