Foreign source classification: FEMA-compliant nominal share capital prevents designation as a foreign source despite share proportions. The amendment inserts a proviso to section 2(1)(j)(vi) of the Foreign Contribution (Regulation) Act, 2010 providing that a company shall not be a foreign source if its nominal share capital is within foreign investment limits under the Foreign Exchange Management Act, 1999 or related rules or regulations, notwithstanding that the nominal value of foreign share capital may exceed one-half of such value at the time of contribution; the proviso is deemed effective from 26 September 2010.
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Foreign source classification: FEMA-compliant nominal share capital prevents designation as a foreign source despite share proportions.
The amendment inserts a proviso to section 2(1)(j)(vi) of the Foreign Contribution (Regulation) Act, 2010 providing that a company shall not be a foreign source if its nominal share capital is within foreign investment limits under the Foreign Exchange Management Act, 1999 or related rules or regulations, notwithstanding that the nominal value of foreign share capital may exceed one-half of such value at the time of contribution; the proviso is deemed effective from 26 September 2010.
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