Purchase of Shares of Indian Company held by a Foreign Company

[Guest]

An individual is proposing to purchase shares of an indian Unlisted company. the shares are held currently by a foreign company. if he has to purchase these shares, RBI has stipulated conditions for the valuation of the shares. Kindly inform me about the procedure/formula. 

What other requirements are to be complied with on remittance abroad?

 

Thank you,

Venkatesan.K

[Anuj Gupta]

The valuations of shares is to be done on the basis of DCF method.

Also if the foreign Company has any capital gain then appropriate TDS u/s 195 needs to be deducted.

Also Form FC-TRS is needed to be filed within 60 days of the transaction to AD.

[Guest]

thank you sir!

AI Summary

Valuation by DCF required for cross border share purchases, with TDS obligations and FC-TRS reporting for remittance compliance. Valuation for purchase of shares from a foreign corporate shareholder must be performed using the Discounted Cash Flow (DCF) method; where the transfer results in capital gains for the foreign transferor, Tax Deduction at Source (TDS) must be applied; and Form FC-TRS must be filed with the Authorized Dealer within sixty days of the transaction, with remittance effected through the Authorized Dealer reflecting these compliance steps.