TaxTMI 
TaxTMI 
Foreign Investments in Preference Shares--Revised Guidelines
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....rity by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20 / 2000 -RB dated May 3, 2000as amended from time to time. In terms of Schedule 1 of the notification, a person resident outside India can purchase equity/ preference/ convertible preference shares and convertible debentures issued by an Indian company. 2. Government of India, Ministry of Finance vid....
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....ld continue to be outside the sectoral cap till their current maturity. (d) Issue of preference shares of any type would continue to conform to the guidelines of RBI/SEBI and other statutory bodies and would be subject to all statutory requirements. 3. Accordingly, it is clarified that with effect from May 1, 2007, only preference shares which are fully and mandatorily convertible into equity ....
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.... end use stipulations, etc. would apply. Since these instruments would be denominated in rupees, the rupee interest rate will be based on the swap equivalent of LIBOR plus the spread as permissible for ECBs of corresponding maturity. 5. It is further clarified that companies which have received funds from outside India for issue of partially/optionally convertible or redeemable preference shares....
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....P. (DIR Series) Circular No.73 dated 08.06.2007] Government of India Ministry of Finance Department of Economic Affairs PRESS NOTE - GUIDELINES FOR FOREIGN INVESTMENT IN PREFERENCE SHARES In supersession of Press Note [F.No.17/3/97-NRJ] dated 31st July, 1997 containing the guidelines for Indian Companies for mobilizing foreign investment through issue of preference shares for financial pro....