The Reserve bank of India (RBI) has launched a Start-up Action Plan to enable easy access of foreign funds for Indian Start-up. In keeping with the Government’s Start-up initiative, the RBI has taken steps to ease doing business and contribute to an ecosystem that is conducive for growth of start-ups. These measures are directed towards enabling framework with respect of cross border transactions (including foreign investments, external commercial borrowings, trade etc.,) to start-ups for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha.

Ease of foreign funding for start-ups through relaxed cross-border financing structures and simplified compliance procedures. Regulatory measures facilitate access to foreign capital for start-ups by easing rules on cross-border transactions, permitting flexible contractual investment structures, allowing deferred receipt of consideration for ownership transfers, and enabling escrow arrangements while simplifying documentation and reporting to reduce compliance friction for inbound financing.