Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Master Direction Foreign Investment in India (Updated as on January 12, 2018)

FEMA - 11/2017-18 - Dated:- 4-1-2018 - RBI/FED/2017-18/60 FED Master Direction No. 11/2017-18 January 4, 2018 (Updated as on January 12, 2018) To, All Authorised Dealer Category - I banks and Authorised banks Madam / Sir, Master Direction - Foreign Investment in India Foreign Investment in India is regulated in terms of clause (b) sub-section 3 of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (FEMA) read with Foreign Exchange Management (Transfer or Issue of a Security by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/ constituents with a view to implementing the regulations framed. 3. Instructions issued on Foreign Investment in India and its related aspects under the FEMA have been compiled in this Master Direction. The list of underlying circulars/ notifications which form the basis of this Master Direction is furnished in the Appendix. 4. Reporting instructions can be found in Master Direction on Re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and/ or amend the Master Direction issued herewith. This Master Direction has been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law Yours faithfully (Shekhar Bhatnagar) Chief General Manager in charge Master Direction - Foreign Investment in India 1. Introduction 1.1 The Foreign Exchange Management Act, 1999 (FEMA) empowers the Reserve Bank to frame regulations .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

FEMA 20(R), shall be deemed to have been made in accordance with FEMA 20(R) and shall accordingly be governed by FEMA 20(R). 1.3 A person resident outside India may hold, own, transfer or invest in a security in India if such security was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India. Such investment will be held by such person on a non-repatriable basis. 2. Key terms Some key terms used in this Master Direction are giv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uity shares of such startup company, within a period not exceeding five years from the date of issue of the convertible note, upon occurrence of specified events as per the other terms and conditions agreed to and indicated in the instrument. 2.4 E-commerce is buying and selling of goods and services including digital products over digital & electronic network. 2.4.1 E-commerce entity are the following entities conducting the e-commerce business a company incorporated under the Companies Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctronic network to act as a facilitator between buyer and seller. 2.4.4 Foreign investment is not permitted in Inventory based model of e-commerce. 2.5 FDI linked performance conditions is the sector specific conditions stipulated in regulation 16 of FEMA 20(R) for companies receiving foreign investment. 2.6 Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside India (a) in an unlisted Indian company; or (b) in 10 percent or more of the post i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Portfolio Investment is any investment made by a person resident outside India in capital instruments where such investment is (a) less than 10 percent of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company or (b) less than 10 percent of the paid up value of each series of capital instruments of a listed Indian company. 2.8 Foreign Portfolio Investor (FPI) is a person registered in accordance with the provisions of Securities Exchange Board of India (Foreign .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent made by a person resident outside India on a repatriable basis in capital instruments of an Indian company or to the capital of an LLP. 2.9.1 Issue/ transfer of participating interest/ right in oil fields by Indian companies to a person resident outside India would be treated as foreign investment. 2.9.2 If a declaration is made by persons as per the provisions of the Companies Act, 2013 about a beneficial interest being held by a person resident outside India, then even though the investmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s in the other enterprise. 2.11 Indian entity is an Indian company or an LLP. 2.12 Investment is to subscribe, acquire, hold or transfer any security or unit issued by a person resident in India. 2.12.1 Investment will include acquisition, holding or transfer of depository receipts issued outside India, the underlying of which is a security issued by a person resident in India. 2.12.2 For the purpose of an LLP, investment shall mean capital contribution or acquisition/ transfer of profit shares. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

14, Infrastructure Investment Trusts (InvIts) governed by the SEBI (InvIts) Regulations, 2014 and Alternative Investment Funds (AIFs) governed by the SEBI (AIFs) Regulations, 2012. 2.14.1 A Venture Capital Fund (VCF) established in the form of a trust or a company or a body corporate and registered under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 will not be considered as an Investment Vehicle for the purpose of FEMA 20 (R) and this Master Direction. 2.15 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

de India who is registered as an Overseas Citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955. 2.19 Resident Indian citizen is an individual who is a person resident in India and is citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955. 2.20 Real estate business is dealing in land and immovable property with a view to earning profit therefrom and does not include development of townships, construction of residential/ commercial p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess provided otherwise. This shall be the composite limit for the investee Indian entity. 2.21.1 FCCBs and DRs having underlying of instruments being in the nature of debt shall not be included in the sectoral cap. 2.21.2 Any equity held by a person resident outside India resulting from conversion of any debt instrument under any arrangement shall be reckoned under the sectoral cap. 2.22 Unit is the beneficial interest of an investor in an investment vehicle. 3. Prohibited sectors/ persons 3.1 I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es. The prohibition is on manufacturing of the products mentioned and foreign investment in other activities relating to these products including wholesale cash and carry, retail trading etc. will be governed by the sectoral restrictions laid down in Regulation 16 of FEMA 20(R). Activities/ sectors not open to private sector investment viz., (i) Atomic energy and (ii) Railway operations Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, managem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vestment. 4. Capital Instruments 4.1 An Indian company is permitted to receive foreign investment by issuing capital instruments to the investor. The capital instruments are equity shares, debentures, preference shares and share warrants issued by the Indian company. 4.2 Equity shares: Equity shares are those issued in accordance with the provisions of the Companies Act, 2013 and will include equity shares that have been partly paid. 4.3 Partly paid shares: Partly paid shares issued on or after .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

riod of 12 months for receipt of the balance consideration need not be insisted upon where the issue size exceeds rupees five hundred crore and the issuer complies with Regulation 17 of the SEBI (Issue of Capital and Disclosure Requirements(ICDR)) Regulations, 2009 regarding monitoring agency. 4.3.4 In case of an unlisted Indian company, the balance consideration amount can be received after 12 months where the issue size exceeds rupees five hundred crore. However, the investee company should ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Share warrants issued on or after July 8, 2014 will be considered as capital instruments. 4.4.1 Share Warrants are those issued by an Indian Company in accordance with the Regulations issued by the Securities and Exchange Board of India in this regard. 4.4.2 At least twenty five percent of the consideration has to be received upfront and the balance amount within eighteen months of issuance of share warrants. 4.4.3 In case of non-payment of balance consideration, the forfeiture of the amount pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mandatorily convertible debentures shall be in compliance with the Companies Act, 2013. 4.6.2 Optionally convertible/ partially convertible debentures issued up to June 7, 2007 or for which funds were received for such issue prior to June 7, 2007 are deemed to have been issued in accordance with FEMA 20(R) till their original maturity. Any extension of maturity prior to June 7, 2007 will be considered as original maturity. 4.7 Preference shares: Preference shares are fully, compulsorily and man .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n of maturity prior to April 30, 2007 will be considered as original maturity. 4.7.3 Non-convertible/ optionally convertible/ partially convertible preference shares funds for which have been received on or after May 1, 2007 shall be treated as debt and shall conform to External Commercial Borrowing (ECB) guidelines framed under Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000. Accordingly, all the norms applicable for ECBs, viz. eligible borrowers, recog .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

right to exit at an assured price. 5. Entry routes and Permitted sectors 5.1 Entry Routes 5.1.1 Automatic Route is the entry route through which investment by a person resident outside India does not require the prior Reserve Bank approval or Government approval. 5.1.2 Government Route is the entry route through which investment by a person resident outside India requires prior Government approval. Foreign investment received under this route shall be in accordance with the conditions stipulate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/ statutory cap, whichever is lower, will not require Government approval or compliance of sectoral conditions as the case may be, if such investment does not result in transfer of ownership and control of the resident Indian company from resident Indian citizens or transfer of ownership or control to persons resident outside India. Other investments by a person resident outside India will be subject to conditions of Government approval and compliance of sectoral conditions as laid down in Regul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

automatic route, subject to applicable laws/ regulations, security and other conditionalities, in sectors/ activities not listed in Regulation 16 of FEMA 20(R) and not prohibited under Regulation 15 of FEMA 20(R). This condition is not applicable for activities in financial services. 5.2.4 Foreign investment in financial services other than those indicated under serial number F in Regulation 16 of FEMA 20(R) would require prior Government approval. 5.2.5 Wherever there is a requirement of minimu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

apital of other Indian company/ies, will require prior Government approval. A core investment company (CIC) will have to additionally follow the Reserve Bank s regulatory framework for CICs. 5.2.7 For undertaking activities which are under automatic route and without FDI linked performance conditions, an Indian company which does not have any operations and also has not made any downstream investment, may receive investment in its capital instruments from persons resident outside India under aut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ermitted Investments by persons resident outside India Unless otherwise specifically stated, any investment made by a person resident outside India shall be subject to the entry routes, sectoral caps or the investment limits, as the case may be, and the attendant conditionalities for making such investment. A person resident outside India may make investment as stated hereinafter. 6.1 Subscribe/ purchase/ sale of capital instruments of an Indian company is permitted as per the directions laid do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ments of an Indian company or Units or contribution to capital of a LLP or a firm or a proprietary concern by Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) on a Non-Repatriation basis is permitted as per the directions laid down in Annex 4. 6.5 Purchase/ sale of securities other than capital instruments by a person resident outside India is permitted as per the directions laid down in Annex 5. 6.6 Investment in a Limited Liability Partnership (LLP) is permitted as per the directio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by Companies Resident outside India is permitted as per directions laid down in Annex 10. 6.11 Acquisition through rights issue or bonus issue 6.11.1 A person resident outside India having investment in an Indian company is permitted to invest in the capital instruments (other than share warrants) issued by such company as a rights issue or a bonus issue subject to the following conditions: The offer made by the Indian company is in compliance with the provisions of the Companies Act, 2013; The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which rights or bonus issue has been made; In case of a listed Indian company, the rights issued to persons resident outside India shall be at a price determined by the company; In case of an unlisted Indian company, the rights issued to persons resident outside India should not be at a price less than the price offered to persons resident in India; Such investment made through rights issue or bonus issue is subject to the conditions as are applicable at the time of such issue; The amount of con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

side India exercising a right which was issued when he/ she was a person resident in India can hold the capital instruments so acquired on exercising the right on a non-repatriation basis. 6.11.3 With effect from November 12, 2002, the Indian investee company could, on an application made to it, allot to existing shareholders who are persons resident outside India additional capital instruments (other than share warrants) as a rights issue over and above their rights entitlement subject to indiv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

person resident outside India who has acquired a right from a person who has renounced it may acquire capital instruments (other than share warrants) against the said rights at the price laid down in para 6.11.1(5) and 6.11.1(6), as applicable. The capital instruments to be acquired on renunciation of rights shall be subject to the same conditions including restrictions in regard to repatriability as applicable to the original holding against which rights issue has been made. 6.12 Issue of Emplo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hare Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act 2013; The employee s stock option / sweat equity shares are in compliance with the sectoral cap applicable to the said company; Issue of employee s stock option / sweat equity shares in a company where investment by a person resident outside India is under the approval route requires prior Government approval; Issue of employee s stock option / sweat equity shares to a citizen of Bangladesh/ Pakis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

than an individual who is citizen of Pakistan or Bangladesh or an entity which is registered/ incorporated in Pakistan or Bangladesh), is permitted to invest in convertible notes issued by an Indian startup company up to twenty five lakh rupees or more in a single tranche. 6.13.2 A startup company, engaged in a sector where investment by a person resident outside India requires Government approval, can issue convertible notes to a person resident outside India only with such approval. 6.13.3 Iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er the requirements are completed or within a period of six months, whichever is earlier. Such an escrow account shall not be permitted to continue beyond a period of six months. 6.13.5 An NRI or an OCI may acquire convertible notes on a non-repatriation basis in accordance with the instructions at para 6.4 of the Master Direction. 6.13.6 A person resident outside India can acquire or transfer by way of sale, convertible notes, from or to, a person resident in or outside India, provided the tran .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l (NCLT)/ Competent Authority, the transferee company or the new company, as the case may be, can issue capital instruments to the existing holders of the transferor company who are resident outside India, subject to the following conditions: The transfer or issue should comply with entry routes, sectoral caps or investment limits, as the case may be, and the attendant conditionalities of foreign investment. In case the foreign investment is likely to breach the Sectoral caps or the attendant co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s or non-convertible redeemable debentures to shareholders who are resident outside India, including depositories that act as trustees for the ADR/ GDR holders, out of its general reserves by way of distribution as bonus, subject to the following conditions: The original investment made in the Indian company by a person resident outside India is in accordance with FEMA 20(R) and the conditions specified therein; The said issue is in accordance with the provisions of the Companies Act, 2013 and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nits so held subject to the terms and conditions specified in this para. 7.1 Transfer from a person resident outside India by way of sale or gift to any person resident outside India 7.1.1 A person resident outside India, not being a non-resident Indian or an overseas citizen of India or an overseas corporate body, may transfer by way of sale or gift the capital instruments of an Indian company or units held by him to any person resident outside India. 7.1.2 It shall also include transfer of cap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e FPI limits or sectoral limits, the FPI is required to sell such capital instruments within five trading days after settlement to a person resident in India eligible to hold such instruments. The breach of the said aggregate or sectoral limit on account of such acquisition for the period between the acquisition and sale, provided the sale is within the prescribed five trading days after settlement, will not be reckoned as a contravention under FEMA 20(R). The guidelines issued by SEBI in this r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of India. 7.2 Transfer by an overseas corporate body (OCB) 7.2.1 An OCB may transfer capital instruments in accordance with the instructions given in the FAQs on de-recognition of OCBs issued vide AP (DIR Series) Circular No.14 dated September 16, 2003. 7.3 Transfer by an NRI/ OCI by way of gift or sale to any person resident outside India 7.3.1 An NRI or an OCI holding capital instruments of an Indian company or units on repatriation basis can transfer the same by way of sale or gift to any pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a person resident in India eligible to hold such instruments. The breach of the said aggregate or sectoral limit, as the case may be, on account of such acquisition for the period between the acquisition and sale, provided the sale is within the prescribed five trading days after settlement, shall not be reckoned as a contravention under FEMA 20(R). 7.3.4 Directions at 7.3.3 above will be effective from the date the second proviso to sub-regulation 2 of regulation 10 of FEMA 20(R) is notified in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sfer the same to a person resident outside India by way of sale, subject to the adherence to entry routes, sectoral caps/ investment limits, pricing guidelines and other attendant conditions as applicable for foreign investment and documentation and reporting requirements for such transfers. 7.4.2 The entry routes, sectoral caps/ investment limits, pricing guidelines and other attendant conditions, however, will not apply in case the transferee is an NRI or an OCI or a company/ trust/ partnershi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on a non-repatriation basis, is permitted to transfer the same by way of gift to an NRI or an OCI or a company/ trust/ partnership firm incorporated outside India and owned and controlled by NRIs or OCIs and the the transferee shall hold them on a non-repatriable basis. 7.6 Sale by a person resident outside India on a recognised stock exchange in India 7.6.1 A person resident outside India, holding capital instruments of an Indian company or units in accordance with FEMA 20(R) is permitted to t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l not apply. 7.7 Transfer by way of gift by an NRI/ OCI holding securities on a non-repatriable basis or a resident to a person resident outside India 7.7.1 An NRI or an OCI holding securities of an Indian company on a non-repatriation basis or a person resident in India may transfer the securities so held by them to a person resident outside India by way of gift with the prior approval of the Reserve Bank and subject to the following conditions: The donee is eligible to hold the securities unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

India as gift during the financial year does not exceed the rupee equivalent of USD 50,000; The application to the Reserve Bank shall be made through the Authorised Dealer Bank. 7.8 Transfer by a person resident outside India of capital instruments containing an optionality clause 7.8.1 A person resident outside India holding capital instruments of an Indian company containing an optionality clause in accordance with FEMA 20(R) and exercising the option/ right, can exit without any assured retu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

date of the transfer agreement; or can be settled through an escrow arrangement between the buyer and the seller for a period not exceeding eighteen months from the date of the transfer agreement; or can be indemnified by the seller for a period not exceeding eighteen months from the date of the payment of the full consideration, if the total consideration has been paid by the buyer to the seller. 7.9.2 The total consideration finally paid for the shares must be compliant with the applicable pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and conditions as specified in the Foreign Exchange Management (Guarantees) Regulations, 2000. 7.10.3 Where the transaction is governed by SEBI guidelines/ regulations, operation of the Escrow accounts for securities shall be in accordance with the relevant SEBI regulations, if any. 7.11 Transfer by way of pledge 7.11.1 Any person being a promoter of a company registered in India (borrowing company), which has raised external commercial borrowing (ECB) in compliance with the Foreign Exchange Man .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

certified that the borrowing company will utilise/ has utilised the proceeds of the ECB for the permitted end­use/s only; no person shall pledge any such unless a no-objection has been obtained from an Authorised Dealer bank that the above conditions have been complied with. 7.11.2 Any person resident outside India holding capital instruments in an Indian company or units may pledge the capital instruments or units, as the case may be: (a) In favour of a bank in India to secure the credit fa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n favour of the lender (bank) would be subject to compliance with the Section 19 of the Banking Regulation Act, 1949. the conditions at (i) to (iv) above will apply suitably for units. (b) In favour of an overseas bank to secure the credit facilities being extended to such person or a person resident outside India who is the promoter of such Indian company or the overseas group company of such Indian company, subject to the following conditions: loan is availed only from an overseas bank; loan i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ized for the declared purpose; the conditions at (i) to (v) above will apply suitably for units. (c) In favour of a Non-Banking Financial Company registered with the Reserve Bank to secure the credit facilities being extended to such Indian company for bona fide purposes, subject to the following conditions: in case of invocation of pledge, transfer of should be in accordance with the credit concentration norm as stated in the Master Direction - Non-Banking Financial Company - Non-Systemically I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in a certificate ex post , from the statutory auditor of investee company, that the loan proceeds received consequent to pledge of shares, have been utilised by the investee company for the declared purpose; the Indian company has to follow the relevant SEBI disclosure norms, as applicable; under no circumstances, the credit concentration norms should be breached by the NBFC. If there is a breach on invocation of pledge, the should be sold and the breach shall be rectified within a period of 30 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es, sectoral caps/ investment limits, pricing guidelines and other attendant conditions at the time of creation of pledge. 7.11.6 Any other transfer by way of pledge would require the prior approval of the Reserve Bank. Cases may be forwarded to the Reserve Bank with the following documents: A copy of the Board Resolution passed by the non-resident company/ies approving the pledge of security acquired in terms of FEMA 20 (R) (number/ percentage of securities to be pledged) of Investee Company he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The details of reporting of the acquisition of the security as prescribed in terms of FEMA 20 (R), if any. 7.12. Transfer from a resident to a person resident outside India where the investee company is in the financial sector 7.12.1 In case of transfer of capital instruments of a company in the financial sector from a resident to a person resident outside India, 'fit and proper/ due diligence' requirement as regards the non-resident investor as stipulated by the respective financial s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, 2016. 7.13.2 In case an investment is held on a non-repatriation basis, in addition to 7.13.1 above, the amount of consideration for transfer may be paid out from or received in, as the case may be, NRO account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. 8. Pricing guidelines 8.1 Capital instruments issued by a company to a person resident outside India 8.1.1 The price of capital instruments of an Indian company issued by it to a person resident .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ost Accountant, in case of an unlisted Indian Company. 8.1.2 In case of convertible capital instruments, the price/ conversion formula of the instrument is required to be determined upfront at the time of issue of the instrument. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations. 8.2 Capital instruments transferred by a person resident in India to a person .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r the SEBI (Delisting of Equity Shares) Regulations, 2009. The price should be determined for such duration as specified in the SEBI Guidelines, preceding the relevant date, which shall be the date of purchase or sale of shares. In case of a company which has completed a delisting process, the price as determined for such duration as specified in the SEBI Guidelines will apply for those shares which have not been tendered to the company during the delisting process; or the valuation of capital i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hould not exceed: the price worked out in accordance with the relevant SEBI guidelines in case of a listed Indian company; the price at which a preferential allotment of shares can be made under the SEBI Guidelines, as applicable, in case of a listed Indian company or in case of a company going through a delisting process as per the SEBI (Delisting of Equity Shares) Regulations, 2009. The price is determined for such duration as specified in the SEBI Guidelines, preceding the relevant date, whic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent and shall exit at the price prevailing at the time of exit. 8.4 Swap of capital instruments 8.4.1 In case of swap of capital instruments, irrespective of the amount, valuation will have to be made by a Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the host country. 8.5 Subscription to Memorandum of Association 8.5.1 Where shares in an Indian company are issued to a person resident outside India in compliance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the fair value worked out, at the time of issuance of such warrants. 8.8 Investment in an LLP 8.8.1 Investment in an LLP either by way of capital contribution or by way of acquisition/ transfer of profit shares, should not be less than the fair price worked out as per 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 sho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er of capital contribution/ profit share of an LLP from a person resident outside India to a person resident in India, the transfer should be for a consideration which is not more than the fair price of the capital contribution/ profit share of an LLP. 8.10 Non-applicability of pricing guidelines 8.10.1 The pricing guidelines will not apply for investment in capital instruments by a person resident outside India on non-repatriation basis. 8.10.2 The pricing guidelines will not be applicable for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bution of more than 50 percent in its capital and having majority profit share. 9.1.3 Company owned by resident Indian citizens is an Indian company where ownership is vested in resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens. 9.1.4 An LLP owned by resident Indian citizens is an LLP where ownership is vested in resident Indian citizens and/ or Indian entities, which are ultimately owned and controlled by resident Indian cit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent. 9.1.8 For the purpose of LLP, Control is the right to appoint majority of the designated partners, where such designated partners, with specific exclusion to others, have control over all the policies of an LLP. 9.1.9 Company controlled by resident Indian citizens is an Indian company, the control of which is vested in resident Indian citizens and/ or Indian companies which are ultimately owned and controlled by resident Indian citizens. 9.1.10 An LLP controlled by resident Indian citizens .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by an Indian entity which has received foreign investment or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity. 9.1.14 Holding Company will have the same meaning as defined in Companies Act, 2013. 9.1.15 Indirect Foreign Investment is downstream investment received by an Indian entity from: another Indian entity (IE) which has received foreign investment and which is not owned and not controlled by resident Indian citizens or is owned o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

their subsidiaries, joint ventures and associates. 9.2 Prohibition 9.2.1 No person resident in India other than an Indian entity can receive Indirect Foreign Investment. 9.3 Conditions for downstream investment that is treated as Indirect Foreign Investment for the investee Indian Entity 9.3.1 An Indian entity which has received indirect foreign investment is required to comply with the entry route, sectoral caps, pricing guidelines and other FDI linked performance conditions as applicable for f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed 100% under automatic route and there are no FDI linked performance conditions. 9.3.4 If the sponsors/ managers/ investment managers of an investment vehicle are individuals, for the downstream investment made by such investment vehicle not to be considered as Indirect Foreign Investment for the investee, the sponsors/ managers/ investment managers of the investment vehicle should be resident Indian citizens. In case the sponsor/ manager/ investment manager is organised in any other form, SEBI .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d and not use funds borrowed in the domestic markets. Subscription by persons resident outside India to non-convertible debentures issued by an Indian company will not be construed as funds borrowed/ leveraged in the domestic market. However, raising of debt and its utilisation will have to comply with the Act and the rules or regulations made thereunder. 9.3.7 Downstream investments which is treated as Indirect Foreign Investment for the investee Indian entity can be made through internal accru .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fect from July 31, 2012, 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 not owned and not controlled by resident Indian citizens or is owned or controlled by persons resident outside India, under Corporate Debt Restructuring (CDR), or other loan restructuring mechanism, or in trading book, or for acquisition of shares due to defaults in loans, will not be considered as indirect foreign .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of debt will not be reckoned for total foreign investment. 9.5.3 The methodology for calculating total foreign investment would apply at every stage of investment in Indian companies and thus in each and every Indian company. 9.5.4 For the purpose of downstream investment, the portfolio investment held as on March 31 of the previous financial year in the Indian company making the downstream investment will be considered for computing the total foreign investment of the investee Indian entity. 9. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent outside India, subject to reporting requirements in Form FCTRS. However, pricing guidelines will not apply for such a transfer. a person resident in India subject to adherence to pricing guidelines. an Indian company with foreign investment and not owned and not controlled by resident Indian citizens or owned or controlled by persons resident outside India. Pricing and reporting guidelines will not apply. 9.6.2 The instructions at 9.6.1 above will be construed accordingly for an LLP. 9.7 Res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9.7.2 In case the statutory auditor has given a qualified report, the same should be immediately brought to the notice of the Regional Office of the Reserve Bank in whose jurisdiction the Registered Office of the company is located and shall also obtain acknowledgement from the RO. 9.7.3 The instructions at 9.7.1 above will be construed accordingly for an LLP 9.8 Applicability of downstream investment guidelines 9.8.1 Downstream investment which is treated as indirect foreign investment for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ases as compliant with FEMA 20(R). 10. Taxes and remittance of sale proceeds 10.1 Taxes 10.1.1 All transaction relating to foreign investment in India are required to be undertaken through banking channels in India and are subject to payment of applicable taxes and other duties/ levies in India. 10.2 Remittance of sale proceeds 10.2.1 Remittance of sale proceeds of an Indian security held by a person resident outside India will have to be made only in accordance with FEMA 20(R). 10.2.2 An author .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se/ sale of capital instruments of an Indian company by a person resident outside India 1.1 Issue by an Indian company 1.1.1 An Indian company is permitted to issue capital instruments to a person resident outside India subject to entry routes, sectoral caps and attendant conditionalities specified for foreign investment; 1.2 Purchase on a stock exchange in India 1.2.1 A person resident outside India may purchase capital instruments of a listed Indian company on a stock exchange in India provide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial Acquisition of Shares and Takeover) Regulations, 2011, provided the right to receive dividend is established and the dividend amount has been credited to an SNRR account opened in terms of Foreign Exchange Management (Deposit) Regulations, 2016 for acquisition of shares on the recognised stock exchange. 1.3 Issue by a wholly owned subsidiary 1.3.1 A wholly owned subsidiary set up in India by a non-resident entity, operating in a sector where 100 percent foreign investment is allowed under th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Indian company within thirty days from the date of issue of capital instruments but not later than one year from the date of incorporation. A certificate issued by the statutory auditor of the Indian company that the amount of pre-incorporation/ pre-operative expenses against which capital instruments have been issued has been utilized for the purpose for which it was received should be submitted with the Form FC-GPR. 1.3.2 Pre-incorporation/ pre-operative expenses will include amounts remitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sue equity shares (excluding partly paid shares) to a person resident outside India against any funds payable by it to such person, the remittance of which is permitted under the Act or the rules or the regulations framed or directions issued thereunder or does not require prior permission of the Central Government or the Reserve Bank under the Act or the rules or the regulations framed or directions issued thereunder subject to the following conditions: Issue of such shares that require Governm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, the remittance of which has been permitted by the Reserve Bank under the Act or the rules or the regulations framed or directions issued thereunder. 1.4.4 In case where permission has been granted by the Reserve Bank for making remittance as stated at 1.4.3 above, the Indian company may issue equity shares (other than partly paid shares) against such remittance provided all regulatory actions with respect to the delay or contravention under the Act or the rules or the regulations framed thereu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ign Trade Policy notified by the Directorate General of Foreign Trade (DGFT) and the regulations on imports issued under the Act; There is an independent valuation of the capital goods/ machineries/ equipment by a third party entity, preferably an independent valuer from the country of import along with production of copies of documents/ certificates issued by the customs authorities towards assessment of the fair-value of such imports; The application should clearly indicate the beneficial owne .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

penses by the statutory auditor; Payments should be made by the foreign investor to the company directly or through the bank account opened by the foreign investor as provided under the Act or the rules or the regulations framed thereunder; and The application (complete in all respects) for capitalization being made within a period of 180 days from the date of incorporation of the company. 2. Mode of payment, issue of capital instruments and refund 2.1 The amount of consideration should be paid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Indian company within sixty days from the date of receipt of the consideration, the amount so received has to be refunded to the person concerned by outward remittance through banking channels or by credit to his NRE/ FCNR(B) accounts, as the case may be, within fifteen days from the date of completion of sixty days. 2.4 In case of partly paid equity shares, the period of 60 days will be reckoned from the date of receipt of each call payment. The forfeiture of the amount paid upfront on non- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

own in the Companies Act, 2013, for delay in refund of the amount so received. Non-compliance of instructions at 2.3 above shall be a contravention of FEMA 20(R) notwithstanding the fact that interest for delayed refund has been paid as per Companies Act, 2013. 2.7 The Indian company issuing capital instruments stated in this annex is permitted to open a foreign currency account with an Authorised Dealer in India in accordance with Foreign Exchange Management (Foreign currency accounts by a pers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Indian company on a recognised stock exchange in India. 1.2 The total holding by each FPI or an investor group as referred in SEBI (FPI) Regulations, 2014, should be less than 10 per cent of the total paid-up equity capital on a fully diluted basis or less than 10 per cent of the paid-up value of each series of debentures or preference shares or warrants issued by an Indian company and the total holdings of all FPIs put together should not exceed 24 per cent of paid-up equity capital on a full .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an FPI increases to 10 percent or more of the total paid-up equity capital on a fully diluted basis or 10 per cent or more of the paid-up value of each series of debentures or preference shares or warrants issued by an Indian company, the total investment so made by the FPI will be re-classified as FDI subject to the conditions as specified by SEBI in this regard and the investee company and the investor complying with the reporting requirements prescribed in Regulation 13 of FEMA 20(R). 1.5 For .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

blic Offer, the price of the shares to be issued is not less than the price at which shares are issued to residents, and in case of issue by private placement, the price is not less than the price arrived in terms of SEBI guidelines or not less than the fair price worked out as per any internationally accepted pricing methodology for valuation of shares on arm s length basis, duly certified by a SEBI registered Merchant Banker or Chartered Accountant, as applicable 1.7 An FPI may undertake short .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng of equity shares by FPIs will only be for the purpose of delivery into short sale. The margin/ collateral will be maintained by FPIs only in the form of cash. No interest shall be paid to the FPI on such margin/ collateral. The designated custodian banks shall separately report all transactions pertaining to short selling of equity shares and lending and borrowing of equity shares by FPIs in their daily reporting with a suitable remark (short sold/ lent/ borrowed equity shares) for the purpos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 2016. 2.2 The foreign currency account and SNRR account can be used only and exclusively for transactions under this Annex. 3. Remittance of sale proceeds 3.1 The sale proceeds (net of taxes) of the investments made can be remitted outside India or may be credited to the foreign currency account or SNRR account of the FPI. 4. Saving 4.1 All investments made by deemed FPIs in accordance with the regulations prior to their registration as FPIs are valid and taken into account for computation of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tions: The purchase and sale is done through a designated authorised dealer branch; The total holding by any individual NRI or OCI should not exceed five percent of the total paid-up equity capital on a fully diluted basis or should not exceed five percent of the paid-up value of each series of debentures or preference shares or warrants issued by an Indian company and the total holdings of all NRIs and OCIs put together should not exceed ten percent of the total paid-up equity capital on a full .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sident External (NRE) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. 2.2 The NRE account will be designated as an NRE (PIS) Account and the designated account should be used exclusively for putting through transactions permitted under this annex. 2.2.1 The specific credits permitted for the NRE (PIS) account are as follows: Inward remittances from abroad in foreign exchange through banking channels; Transfer from the NRI s/ OCI s other NRE acco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mittances of dividend or income earned on investment made on repatriation basis in accordance with instructions contained in this annex; Amounts paid on account of purchase of capital instruments on repatriation basis on stock exchanges in accordance with instructions contained in this annex; Any charges on account of sale/ purchase of capital instruments in accordance with instructions contained in this annex; and Remittances outside India or transfer to NRE/ FCNR (B) accounts of the NRI/ OCI o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertible notes of an Indian company or Units or contribution to the capital of an LLP by Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) on Non-Repatriation basis 1. Purchase/ sale of capital instruments or convertible notes or units or contribution to the capital of an LLP 1.1 A Non-resident Indian (NRI) or an Overseas Citizen of India (OCI), including a company, a trust and a partnership firm incorporated outside India and owned and controlled by NRIs or OCIs, is permitted to purch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with the investment made by residents. 1.3 An NRI or an OCI including a company, a trust and a partnership firm incorporated outside India and owned and controlled by NRIs or OCIs, cannot invest in capital instruments or units of a Nidhi company or a company engaged in agricultural/ plantation activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights. 2. Mode of Payment 2.1 The amount of consideration should be received from abroad through ban .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an Indian company or the consideration for contribution to the capital of an LLP and the capital appreciation thereon cannot be repatriated abroad. B. Investment in a firm or a proprietary concern 1. Contribution to capital of a firm or a proprietary concern 1.1 An NRI or an OCI is permitted to invest, on a non-repatriation basis, by way of contribution to the capital of a firm or a proprietary concern in India. 1.2 The investee firm or proprietary concern should not be engaged in any agricultur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly to the NRO account of the person concerned, irrespective of the type of account from which the consideration was paid. 3.2 The amount invested for contribution to the capital of a firm or a proprietary concern and the capital appreciation thereon cannot be repatriated abroad. Annex 5 Purchase and sale of securities other than capital instruments by a person resident outside India 1. Permission to person resident outside India 1.1 Permission to Foreign Portfolio Investors (FPIs) 1.1.1 An FPI i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the domestic investors. FPIs can invest in government securities, the coupons received on their existing investments in government securities. These investments will be outside the applicable limit for investments by FPIs in government securities. (b) Commercial papers issued by an Indian company. FPIs are not be allowed to make any further investment in CPs after February 03, 2015. (c) Units of domestic mutual funds. FPIs are not permitted to make investment in liquid and money market mutual fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e) Non-convertible debentures/ bonds issued by an Indian company. All investments made by an FPI after February 03, 2015, within the limit for investment in corporate bonds, will have to be made in corporate bonds with a minimum residual maturity of three years. In addition, investments made after February 03, 2015 against the limits vacated when the current investment runs off either through sale or redemption, has to be made in corporate bonds with a minimum residual maturity of three years. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly dispose of these bonds/ NCDs either by way of sale to a third party or to the issuer. The terms of offer to FPIs should contain a clause that the issuer of such debt securities shall immediately redeem/ buyback the said securities from the FPIs in such an eventuality. FPIs are permitted to invest in unlisted NCDs/ bonds issued by an Indian company subject to a minimum residual maturity of three years and end-use restriction on investment in real estate business, capital market and purchase of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dit enhanced bonds. (i) Listed non-convertible/ redeemable preference shares or debentures issued in terms of Regulation 9 of FEMA 20(R). (j) Security Receipts (SRs) issued by Asset Reconstruction Companies and securitization companies subject to directions/ guidelines of the Reserve Bank [Department of Non-Banking Regulations (DNBR)] and the following conditions: FPIs can invest up to 100 per cent of each tranche in SRs issued by ARCs, subject to provisions of the Securitisation and Reconstruct .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised debt instruments, including (i) any certificate or instrument issued by a special purpose vehicle (SPV) set up for securitisation of asset/s with banks, Financial Institutions or NBFCs as originators; and/ or (ii) any certificate or instrument issued and listed in terms of the Securities and Exchange Board of India (Regulations on Public Offer and Listing of Securitised Debt Instruments), 2008. (l) FPI can acquire NCDs/ bonds, which are under default, either fully or partly, in the repaymen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. 1.1.2 FPIs can offer the following instruments as collateral to the recognized Stock Exchanges in India for their transactions in exchange traded derivative contracts: domestic Government Securities (acquired in accordance with the provisions of Schedule 5 to FEMA 20(R) and subject to the overall limits specified by the SEBI from time to time); foreign sovereign securities with AAA rating; corporate bonds acquired by FPIs in accordance with provisions of Schedule 5 to FEMA 20(R); cash Note: Cr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rer securities) or treasury bills or units of domestic mutual funds; Bonds issued by a Public Sector Undertaking (PSU) in India; Shares in Public Sector Enterprises being disinvested by the Central Government, provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids; Bonds/ units issued by Infrastructure Debt Funds; Listed non-convertible/ redeemable preference shares or debentures issued in terms of Regulation 9 of these Regulations; 1.2.2 A NR .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or OCIs in Debt Capital Instruments (Tier II) shall be accordance with the extant policy for investment by NRIs or OCIs in other debt instruments. 1.2.4 A NRI may subscribe to National Pension System governed and administered by Pension Fund Regulatory and Development Authority (PFRDA), provided such person is eligible to invest as per the provisions of the PFRDA Act, 2013. The annuity/ accumulated saving will be repatriable. 1.2.5 NRIs/ OCIs can offer instruments as may be specified by the Rese .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icates. 1.3.2 A NRI or an OCI can, without limit, purchase on non-repatriation basis, listed non-convertible/ redeemable preference shares or debentures issued in terms of Regulation 9 of FEMA 20(R). 1.3.3 A NRI or an OCI can, without limit, on non-repatriation basis subscribe to the chit funds authorised by the Registrar of Chits or an officer authorised by the State Government in this behalf. 1.4 Permission to Foreign Central Banks or a Multilateral Development Bank for purchase of Government .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dated securities subject to conditions as may be prescribed by the Reserve Bank. 1.5 Permission to other non-resident investors for purchase of securities 1.5.1 Long term investors like Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds which are registered with Securities and Exchange Board of India as eligible investors in Infrastructure Debt Funds can purchase on repatriation basis Rupee Denominated bonds/ units issued by Infrastructure Debt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re not allowed to invest in treasury bills. Commercial papers issued by an Indian company. With effect from February 03, 2015, long term investors are not allowed to make any further investment in CPs. Units of domestic mutual funds. Long term investors are not allowed to make any further investment in CPs after February 03, 2015. perpetual debt instruments eligible for inclusion as Tier I capital and debt capital instruments as upper Tier II capital issued by banks in India to augment their cap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cture sector. The term Infrastructure Sector has the same meaning as given in the Harmonised Master List of Infrastructure sub-sectors approved by Government of India vide Notification F. No. 13/06/2009-INF dated March 27, 2012 as amended/ updated. non-convertible debentures/ bonds issued by Non-Banking Finance Companies categorized by the Reserve Bank as Infrastructure Finance Companies (IFCs) . primary issues of non-convertible debentures/ bonds provided such non-convertible debentures/ bonds .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on-convertible/ redeemable preference shares or debentures issued in terms of Regulation 9 FEMA 20(R); security Receipts (SRs) issued by Asset Reconstruction Companies up to 100 percent of each tranche, subject to directions/ guidelines of the Reserve Bank [Department of Non-Banking Regulations (DNBR)] security receipts (SRs) issued by securitization companies 1.5.3 The conditions prescribed at 1.1.1 of this annex for investment made by FPIs shall mutatis mutandis apply for investment made by lo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nnex. 2.2 The amount of consideration for purchase of instruments by NRIs or OCIs on repatriation basis should be received from abroad through banking channels or paid out of funds held in NRE/ FCNR(B) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. 2.3 The amount of consideration for (a) purchase of instruments by NRIs or OCIs on non-repatriation basis and (b) subscriptions to the National Pension System by NRIs should be received from abroad t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se of instruments by other non-resident investors should be received from abroad through banking channels. 3. Permission for Sale of instruments 3.1 A person resident outside India who has purchased instruments in accordance with this annex can sell/ redeem the instruments. 4. Remittance/ credit of sale/ maturity proceeds 4.1 The sale/ maturity proceeds (net of taxes) of instruments held by Foreign Portfolio Investors (FPIs) can be remitted outside India or credited to the foreign currency accou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the instruments were purchased on repatriation basis. 4.3 In all other cases, the sale/ maturity proceeds (net of taxes) can be remitted abroad or credited to an account opened with the prior permission of the Reserve Bank. 5. Limits 5.1 The limits for the various debt instruments will be specified through AP (Dir Series) Circulars. Annex 6 Investment in a Limited Liability Partnership (LLP) 1. Investment in an LLP 1.1 Foreign Investment was permitted in an LLP with effect from May 20, 2011. 1. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stment by way of profit share will fall under the category of reinvestment of earnings. 1.4 Investment in an LLP is subject to the conditions prescribed in the Limited Liability Partnership Act, 2008. 1.5 A company having foreign investment, engaged in a sector where foreign investment up to 100 percent is permitted under the automatic route and there are no FDI linked performance conditions, can be converted into an LLP under the automatic route. 1.6 An LLP having foreign investment, engaged in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Remittance of disinvestment proceeds 3.1 The disinvestment proceeds can be remitted outside India or may be credited to NRE or FCNR(B) account of the person concerned. Annex 7 Investment by a Foreign Venture Capital Investor (FVCI) 1. Investment by Foreign Venture Capital Investor (FVCI) 1.1 Investment by an FVCI was permitted with effect from December 26, 2000 1.2 An FVCI is permitted to invest in securities (not listed on a recognised stock exchange at the time of issue), of an Indian company .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oved by Government of India vide Notification F. No. 13/06/2009-INF dated March 27, 2012 as amended/ updated. 1.3 An FVCI can invest in securities issued by a startup, irrespective of the sector in which the startup is engaged. 1.4 An FVCI can acquire units of a Venture Capital Fund (VCF) or of a Category I Alternative Investment Fund (Cat-I AIF) or units of a scheme or of a fund set up by a VCF or by a Cat-I AIF. 1.5 Investment by an FVCI in capital instruments of an Indian company will be subj .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at a price that is mutually acceptable to the buyer and the seller/ issuer. In case of sale to a person resident outside India, the buyer should be an eligible acquirer. 1.9 An FVCI may also receive the proceeds of the liquidation of VCFs or of Cat-I AIFs or of schemes/ funds set up by the VCFs or Cat-I AIFs. 2. Mode of payment 2.1 The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Spec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in an Investment Vehicle 1. Investment in units of an Investment Vehicle 1.1 A person resident outside India (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than an entity incorporated in Pakistan or Bangladesh) is permitted, with effect from November 13, 2016, to invest in units of Investment Vehicles. 1.2 The sale/ transfer/ redemption of units acquired/ purchased in accordance with this annex are subject to the regulations framed by Securities .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aid as inward remittance from abroad through banking channels or by way of swap of shares of a Special Purpose Vehicle or out of funds held in NRE or FCNR(B) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. 3. Remittance of sale/ maturity proceeds 3.1 The sale/ maturity proceeds (net of taxes) of the units may be remitted outside India or credited to the NRE or FCNR(B) account of the person concerned. Annex 9 Investment in Depository receipts by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r transfer eligible instruments to a foreign depository for the purpose of issuance of depository receipts in accordance with the DR Scheme, 2014 and guidelines issued by Central Government in this regard. 1.3 A domestic custodian can purchase eligible instruments on behalf of a person resident outside India, for the purpose of converting the instruments so purchased into depository receipts in terms of DR Scheme 2014. 1.4 The aggregate of eligible instruments which may be issued or transferred .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nder the applicable laws. 2. Saving 2.1 Depository Receipts issued under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 shall be deemed to have been issued under the corresponding provisions of DR Scheme 2014 and have to comply with the provisions laid out in this annex. Annex 10 Issue of Indian Depository Receipts (IDRs) 1. Issue of IDRs 1.1 Companies incorporated outside India may issue IDRs through a Domestic Depository, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Rupees only; 1.5 The proceeds of the issue of IDRs shall be immediately repatriated outside India by the companies issuing such IDRs. 2. Purchase/ sale of IDRs: 2.1 An FPI or an NRI or an OCI may purchase, hold or sell IDRs 2.2 NRIs or OCIs may invest in the IDRs out of funds held in their NRE/ FCNR(B) account, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. 2.3 There would be an overall cap of USD 5 billion for raising of capital by issuance of IDRs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version