Dear Sir
a) My client is Indian Private limited co., dealing in Trading of plastic granules imported from abroad as well as in India
b) Its shares to the extent of 99% are held by foreign national.
c) The foreign national is a director in a Dubai based company which also deals in trading of plastic granules.
d) The foreign national got necessary approval from RBI for infusion of capital
e) Now he wants to transfer his shares in favour of Dubai based company so as to make Indian Private Limited co., as wholly owned subsidiary of Dubai co.
Now my question is whether the foreign national can transfer his shares in favour of Dubai co., if so what are the procedures to be complied with
Regards
G Muralidharan
Foreign ownership transfer: ensure regulatory approvals and corporate compliance before transferring shares to a foreign company. Transfer of shares by a foreign individual to a foreign corporate entity to make an Indian private limited company a wholly owned subsidiary raises issues of foreign investment structuring and compliance. The question focuses on lawfulness of transferring shares after prior central bank approval for capital infusion and the procedural steps required. Practical considerations include applicability of the foreign investment regime to change of ownership, conditions attached to earlier approvals, company law transfer formalities, and whether fresh regulatory approvals or filings will be required. The recorded advice is to consult a practising company secretary or chartered accountant. (AI Summary)
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