Convertible note investments by non-residents in Indian startups require eligibility, approvals and compliance with foreign-investment conditions.

Convertible notes may be purchased from an Indian startup company by a person resident outside India, subject to eligibility restrictions and a minimum investment amount in a single tranche. Issuance in sectors requiring Government approval requires that approval, while equity shares issued upon conversion must comply with foreign-investment entry routes, sectoral caps, pricing guidelines and attendant conditions. Transfers of convertible notes must follow entry routes and pricing guidelines applicable to capital instruments.

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