TMI BlogForeign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019X X X X Extracts X X X X X X X X Extracts X X X X ..... b) They shall come into force from the date of their publication in the Official Gazette. 2. Definitions In these regulations, unless the context requires otherwise, - a) 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999); b) Rules means Foreign Exchange Management (Non-Debt Instrument) Rules, 2019; c) The words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act or the Rules. 3. Mode of Payment and Remittance of sale proceeds: 3.1 Schedule of the Rules Instructions on Mode of payment and Remittance of sale proceeds I. Schedule I (Purchase or sale of equity instruments of an Indian company by a person resident outside India) A. Mode of payment (1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/Escrow account maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency account and SNRR account shall be used only and exclusively for transactions under this Schedule. B. Remittance of sale proceeds The sale proceeds (net of taxes) of equity instruments and units of domestic mutual fund may be remitted outside India or credited to the foreign currency account or a SNRR account of the FPI. The sale proceeds (net of taxes) of units of investment vehicles other than domestic mutual fund may be remitted outside India. III. Schedule III (Investments by Non- Resident Indian (NRI) or Overseas Citizen of India (OCI) on repatriation basis) A. Mode of payment (1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a Non-Resident External (NRE) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. (2) The NRE account will be desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be repatriated abroad. 2. Investment in a firm or a proprietary concern. A. Mode of payment The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/NRO account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. B. Sale/maturity proceeds (1) The disinvestment proceeds shall be credited only to the NRO account of the person concerned, irrespective of the type of account from which the consideration was paid; (2) The amount invested for contribution to the capital of a firm or a proprietary concern and the capital appreciation thereon shall not be allowed to be repatriated abroad. V. Schedule V (Investment by other non-resident investors) A. Mode of Payment The amount of consideration shall be paid out of inward remittances from abroad through banking channels. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit) Regulations, 2016. B. Remittance of sale/maturity proceeds The sale/maturity proceeds (net of taxes) of the units may be remitted outside India or may be credited to the NRE or FCNR(B) account of the person concerned. IX. Schedule X (Issue of Indian Depository Receipts) A. Mode of Payment 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. B. Remittance of sale/maturity proceeds Redemption/conversion of IDRs into underlying equity shares of the issuing company shall be a compliance the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004. 3.2 Issue of Convertible Notes by an Indian start-up company: A start-up company issuing convertible notes to a person resident outside India shall receive the amount of consideration by in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia holding equity instruments on a non-repatriable basis and person resident in India is not required to be reported in Form FC-TRS. (b) Transfer of equity instruments on a recognised stock exchange by a person resident outside India shall be reported by such person in Form FC-TRS. (c) Transfer of equity instruments prescribed in Rule 9(6) of the Rules, shall be reported in Form FC-TRS on receipt of every tranche of payment. The onus of reporting shall be on the resident transferor/transferee. (d) Transfer of 'participating interest/rights' in oil fields shall be reported Form FC-TRS. The form FCTRS shall be filed within sixty days of transfer of equity instruments or receipt/remittance of funds whichever is earlier. (4) Form Employees' Stock Option (ESOP): An Indian company issuing employees' stock option to persons resident outside India who are its employees/directors or employees/directors of its holding company/joint venture / wholly owned overseas subsidiary/subsidiaries shall file Form-ESOP, within 30 days from the date of issue of employees' stock option. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertible Notes (CN) : a. The Indian start-up company issuing Convertible Notes to a person resident outside India shall file Form CN within 30 days of such issue. b. A person resident in India, who may be a transferor or transferee of Convertible Notes issued by an Indian start-up company shall report such transfers to or from a person resident outside India, as the case may be, in Form CN within 30 days of such transfer. Provided, the format, periodicity and manner of submission of such reporting shall be as prescribed by Reserve Bank in this regard. Provided further that unless otherwise specifically stated in these regulations all reporting shall be made through or by an Authorised Dealer bank, as the case may be. 5. Delays in reporting The person/entity responsible for filing the reports provided in Regulation 4 above shall be liable for payment of late submission fee, as may be decided by the Reserve Bank, in consultation with the Central Government, for any delays in reporting. [F. No. 1/14/EM/2015] AJAY KUMAR MISRA, Chief General Manager-in-charge - Notification Tax Manage ..... X X X X Extracts X X X X X X X X Extracts X X X X
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