FOREIGN EXCHANGE MANAGEMENT (TRANSFER OR ISSUE OF SECURITY BY A PERSON RESIDENT OUTSIDE INDIA) REGULATIONS, 2000 (From Regulation 1 to Regulation SCHEDULE 11)
Convertible notes by startups allow foreign residents to invest subject to remittance, approval and RBI pricing rules. Regulation 6D permits issuance of convertible notes by recognised Indian startup companies to non-residents subject to eligibility exclusions and a single-tranche investment threshold; issuance in approval-sensitive sectors requires prior government consent and conversion into shares must follow the principal regulations. Consideration must be received by inward remittance or debit to permitted foreign currency/escrow accounts, with escrow accounts closed upon completion or within six months. NRIs may acquire notes on a non-repatriation basis. Transfers of notes must follow RBI pricing guidelines and, where applicable, obtain government approval. Issuers must furnish reports to the Reserve Bank.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Convertible notes by startups allow foreign residents to invest subject to remittance, approval and RBI pricing rules.
Regulation 6D permits issuance of convertible notes by recognised Indian startup companies to non-residents subject to eligibility exclusions and a single-tranche investment threshold; issuance in approval-sensitive sectors requires prior government consent and conversion into shares must follow the principal regulations. Consideration must be received by inward remittance or debit to permitted foreign currency/escrow accounts, with escrow accounts closed upon completion or within six months. NRIs may acquire notes on a non-repatriation basis. Transfers of notes must follow RBI pricing guidelines and, where applicable, obtain government approval. Issuers must furnish reports to the Reserve Bank.
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