FDI by a USA Citizen

[RAJEEV JAIN]

Dear all,

Please throw some light on whether a person (being a USA resident and citizen) can hold shares in his own name if he transfers funds from his company in which he is a shareholder and Director in USA?

For Eg. Mr A wants to be a shareholder in ABC Ltd in India but wants to transfer funds to ABC ltd from XYZ Inc. USA and become shareholder of ABC Ltd himself. Mr. A is not bringing funds from his own bank account.

Thanks in advance.

[YAGAY and SUN]

There are only two modes:

Automatic Route

Approval Route

In this matter we understand that necessary permission is required from RBI.

[DR.MARIAPPAN GOVINDARAJAN]

You may have to comply with the provisions of the Companies Act, 2013 also.

AI Summary

FDI by foreign individuals: route via automatic or approval pathways determines permissibility and regulatory permission requirements.
Investment by a United States citizen in an Indian company funded from a foreign company must be structured under either the Automatic Route or the Approval Route under the FDI framework; routing from a foreign corporate account affects permissibility and procedural requirements. The share acquisition will also need to comply with the Companies Act, 2013 and obtain regulatory permission where prior approval is mandated.