AI Drafter 
TaxTMI 
TaxTMI 
Updated instructions and clarification relating to FDI Policy
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....ry" sector. A number of queries had been received from stakeholders with regard to the coverage of this term. The coverage/scope of the term 'controlled conditions' has now been separately defined in respect of 'animal husbandry', 'development of seeds', 'pisciculture and aquaculture' and 'floriculture/horticulture/cultivation of vegetables and mushrooms'. It is expected that this would lead to adequate clarity on FDI in this sector. (iii)Clarification on the concept of value-addition in case of mining and mineral separation of Titanium bearing minerals {Para 5.2.3.3.2(ii)}: This is relevant because FDI for separation of Titanium bearing minerals and ores is subject to the setting up of value-addition facilities in India. It has been clarified that the objective of the policy is to ensure that raw material available in the country is utilized for setting up downstream industries and the technology available internationally is available for setting up such industries within the country. Thus, if with the technology transfer, the objective of the FDI policy can be achieved, the conditions stipulated in regard of setting up value addition facilities shall be deemed to be fulfill....
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....d by the company upon issue of the shares to the non-resident investors {Para 5.2.25.2 - Note below}: This is relevant in sectors such as NBFC and construction development where "minimum capitalization" requirements have been stipulated. This clarification is expected to bring in requisite clarity on the issues of inclusion of share premium within minimum capitalization and on the circumstances under which such share premium can be counted towards minimum capitalization. (ix) Amendment of Note below the definition of 'Capital' to allow for FDI in partly-paid shares and warrants through the Government route {Para 2.1.5}: At present, capital is defined as "equity shares, fully, compulsorily and mandatorily convertible preference shares, fully compulsorily and mandatorily convertible debentures". This clarification, allowing for FDI in partly-paid shares and warrants, through the Government route, is intended to bring in consistency with extant practice. (x) Changes in the paragraphs relating to issue price of shares and addition of a paragraph on share-swaps, consistent with extant instructions {Paras 3.4.2 and 3.5.6}: The latter has been included as a number of cases of sha....
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.... CHAPTER-5 POLICY ON ROUTE, CAPS AND ENTRY CONDITIONS 5.1 PROHIBITION ON INVESTMENT IN INDIA 5.2 SECTOR-SPECIFIC POLICY FOR FDI AGRICULTURE 5.2.1 Agriculture & Animal Husbandry 5.2.2 Tea plantation 39 39 33 39 39 37 39 41 2 INDUSTRY MINING 42 42 5.2.3 Mining 42 MANUFACTURING 5.2.4 Manufacture of items reserved for production in Micro and Small Enterprises (MSES) 44 44 5.2.5 Defence Industry 44 POWER 47 5.2.6 Electric Generation, Transmission, Distribution and Trading 47 SERVICES SECTOR 5.2.7 Civil Aviation Sector 48 48 5.2.8 Asset Reconstruction Companies 5.2.9 Banking -Private sector 5.2.10 Banking- Public Sector 5.2.11 Broadcasting 5.2.12 Commodity Exchanges 5.2.13 Development of Townships, Housing, Built-up infrastructure and Construction-development projects 5.2.14 Credit Information Companies (CIC) 5.2.15 Industrial Parks both setting up and in established Industrial Parks 5.2.16 Insurance 5.2.17 Infrastructure Company in the Securities Market 5.2.18 Non-Banking Finance Companies (NBFC) 5.2.19 Petroleum & Natural Gas Sector 5.2.20 Print Media 5.2.21 Security Agencies in Private sector 5.2.22 Satellites - Establishment and op....
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.... of the direct investor. The motivation of the direct investor is a strategic long term relationship with the direct investment enterprise to ensure the significant degree of influence by the direct investor in the management of the direct investment enterprise. Direct investment allows the direct investor to gain access to the direct investment enterprise which it might otherwise be unable to do. The objectives of direct investment are different from those of portfolio investment whereby investors do not generally expect to influence the management of the enterprise. In the Indian context, FDI is defined in Para 2.1.12 of this Circular. 1.1.4 It is the policy of the Government of India to attract and promote productive FDI in activities which significantly contribute to industrialization and socio-economic development. FDI supplements domestic capital and technology. 1.1.5 The Legal basis: Foreign Direct Investment by non-resident in resident entities through transfer or issue of security to person resident outside India is a 'Capital account 5 transaction' and is regulated under FEMA, 1999 and its regulations. Keeping in view the current requirements, the Governmen....
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....e reference to any modifications, amendments or re-enactments thereof. 7 CHAPTER 2: DEFINITIONS 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.1.6 2.1.7 2.1.8 DEFINITIONS: The definitions of terms used in this circular are as follows:- 'AD Category-I Bank' means a bank( Scheduled Commercial, State or Urban Cooperative) which is authorized under Section 10(1) of FEMA to undertake all current and capital account transactions according to the directions issued by the RBI from time to time. 'Authorized Bank' means a bank including a co-operative bank (other than an authorized dealer) authorized by the Reserve Bank to maintain an account of a person resident outside India 'Authorized Dealer' means a person authorized as an authorized dealer under sub-section (1) of section 10 of FEMA. 'Authorized Person' means an authorized dealer, money changer, offshore banking unit or any other person for the time being authorized under Sub- section (a) of Section 10 of FEMA to deal in foreign exchange or foreign securities. “Capital' means equity shares; fully, compulsorily & mandatorily convertible preference shares; fully, compulsorily & mandatorily convertible debentures. ....
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....cy. FCCBs are issued in accordance with the Foreign Currency Convertible Bonds and ordinary shares (through depository receipt mechanism) Scheme 1993 and subscribed by a non-resident entity in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part. 'FDI' means investment by non-resident entity/person resident outside India in the capital of the Indian company under Schedule 1 of FEM(Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000. 'FEMA' means the Foreign Exchange Management Act 1999 (42 of 1999). 'FIPB' means the Foreign Investment Promotion Board constituted by the Government of India. 9 2.1.15 2.1.16 2.1.17 2.1.18 2.1.19 2.1.20 2.1.21 2.1.22 2.1.23 'Foreign Institutional Investor' (FII) means an entity established or incorporated outside India which proposes to make investment in India and which is registered as a FII in accordance with the SEBI (FII) Regulations 1995. 'Foreign Venture Capital Investor' (FVCI) means an investor incorporated and established outside India, which is registered under the Securities and Exchange Board of India (Foreign Venture....
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....vided family, (iii) a company (iv) a firm (v) an association of persons or a body of individuals whether incorporated or not, (vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and (vii) any agency, office, or branch owned or controlled by such person. 'Person of Indian Origin' (PIO) means a citizen of any country other than Bangladesh or Pakistan, if (i) he at any time held Indian Passport (ii) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (iii) the person is a spouse of an Indian citizen or a person referred to in 11 2.1.31 2.1.32 2.1.33 2.1.34 2.1.35 2.1.36 sub-clause (i) or (ii). 'Person resident in India' means - (i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include - (A) A person who has gone out of India or who stays outside India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purp....
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....corporated in Pakistan) can invest in India, subject to the FDI Policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest in India under the FDI Policy, only under the Government route. 3.1.2 NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in the capital of Indian companies on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels. 3.1.3 OCBs have been derecognized as a class of Investors in India with effect from September 16, 2003. Erstwhile OCBs which are incorporated outside India and are not under the adverse notice of RBI can make fresh investments under FDI Policy as incorporated non-resident entities, with the prior approval of Government of India if the investment is through Government route; and with the prior approval of RBI if the investment is through Automatic route. 3.1.4 (i) An FII may invest in the capital of an Indian company either under the FDI Scheme/Policy or the Portfolio Investment Scheme. 10% individual limit and 24% aggreg....
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....equivalent of London Interbank Offered Rate (LIBOR) plus the spread as permissible for ECBs of corresponding maturity 3.2.3 The inward remittance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. 3.2.4 Issue of shares by Indian Companies under FCCB/ADR/GDR (i) Indian companies can raise foreign currency resources abroad through the issue of FCCB/DR (ADRs/GDRs), in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India there under from time to time. (ii) A company can issue ADRs / GDRs if it is eligible to issue shares to persons resident outside India under the FDI Policy. However, an Indian listed company, which is not eligible to raise funds from the Indian Capital Market including a 15 company which has been restrained from accessing the securities market by the Securities and Exchange Board of India (SEBI) will not be eligible to issue ADRs/GDRs. (iii) Unlisted companies, which have not yet accessed the ADR/GDR route for raising capital in the international market, w....
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....ertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India and directions issued by the Reserve Bank, from time to time. (ix) The pricing of sponsored ADRs/GDRs would be determined under the provisions of the Scheme of issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India and directions issued by the Reserve Bank, from time to time. 3.2.5 (i) Two-way Fungibility Scheme:A limited two-way Fungibility scheme has been put in place by the Government of India for ADRs/GDRs. Under this Scheme, a stock broker in India, registered with SEBI, can purchase shares of an Indian company from the market for conversion into ADRs/GDRs based on instructions received from overseas investors. Re-issuance of ADRs/GDRs would be permitted to the extent of ADRs/GDRs which have been redeemed into underlying shares and sold in the Indian market. (ii) Sponsored ADR/GDR issue: An Indian company can also sponsor an issue of ADR / GDR. Under this mechanism, the company offers its resident shareholders a choice....
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....e is not permitted. 3.4 CONDITIONS ON ISSUE/TRANSFER OF SHARES 3.4.1 The capital instruments should be issued within 180 days from the date of receipt of the inward remittance or by debit to the NRE/FCNR (B) account of the non-resident investor. In case, the capital instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident 1 DIPP has released a Discussion paper towards allowing FDI in Limited Liability Partnership firms,calling for views/suggestions from the stakeholders to review the extant policy 18 investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and would attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the RBI, on the merits of the case. - 3.4.2 Issue price of shares – Price of shares issued to persons....
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.... infrastructure companies in the securities market viz. Stock Exchanges, Clearing Corporations, and Depositories, Commodity Exchanges, etc.) under private arrangement to a person resident outside India, subject to the guidelines given in Annex-2. (f) General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India, subject to the guidelines given in Annex-2. (g) The above General Permission also covers transfer by a resident to a non- resident of shares/convertible debentures of an Indian company, engaged in an activity earlier covered under the Government Route but now falling under Automatic Route, as well as transfer of shares by a non-resident to an Indian company under buyback and/or capital reduction scheme of the company. However, this General Permission is not available in case of transfer of shares / debentures, from a Resident to a Non-Resident/Non-Resident Indian, of an entity engaged in any activity in the financial services sector (i.e. Banks, NBFCs, ARCS, CICs, Insurance, infrastructure companies in the securities market such as....
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....e the non-resident acquirer proposes deferment of payment of the amount of consideration, prior approval of the Reserve Bank would be required, as hitherto. Further, in case approval is granted for a transaction, the same should be reported in Form FC-TRS, to an 21 AD Category - I bank for necessary due diligence, within 60 days from the date of receipt of the full and final amount of consideration. (ii) The transfer of capital instruments of companies engaged in sectors falling under the Government Route from residents to non-residents by way of sale or otherwise requires Government approval followed by permission from RBI. (iii) A person resident in India, who intends to transfer any capital instrument, by way of gift to a person resident outside India, has to obtain prior approval from Reserve Bank. While forwarding applications to Reserve Bank for approval for transfer of capital instruments by way of gift, the documents mentioned in Annex- 3 should be enclosed. Reserve Bank considers the following factors while processing such applications: (a) The proposed transferee (donee) is eligible to hold such capital instruments under Schedules 1, 4 and 5 of Notificati....
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....S - 3.5.1 Issue of Rights/Bonus Shares – FEMA provisions allow Indian companies to freely issue Rights/Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap, if any. However, such issue of bonus / rights shares has to be in accordance with other laws/statutes like the Companies Act, 1956, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (in case of listed companies), etc. The offer on right basis to the persons resident outside India shall be: (a) in the case of shares of a company listed on a recognized stock exchange in India, at a price as determined by the company; (b) in the case of shares of a company not listed on a recognized stock exchange in India, at a price which is not less than the price at which the offer on right basis is made to resident shareholders. 3.5.2 Prior permission of RBI for Rights issue to erstwhile OCBs- OCBs have been de-recognised as a class of investors from September 16, 2003. Therefore companies desiring to issue rights share to such erstwhile OCBs will have to take specific prior 23 permission from RBI. As such, entitlement of rights share is not automatically availabl....
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....Companies Act, 1956. The Indian company can issue ESOPs to employees who are resident outside India, other than to the citizens of Pakistan. ESOPs can be issued to the citizens of Bangladesh with the prior approval of the FIPB. (iii)The issuing company is required to report the details of such issues to the Regional Office concerned of the Reserve Bank, within 30 days from the date of issue of shares. 3.5.6 Share Swap: In cases of investment by way of swap of shares, irrespective of the amount, valuation of the shares will have to be made by a Category I Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the host country. Approval of the Foreign Investment Promotion Board (FIPB) will also be a prerequisite for investment by swap of shares. 25 CHAPTER 4: CALCULATION, ENTRY ROUTE, CAPS, ENTRY CONDITIONS, ETC. OF INVESTMENT 4.1 CALCULATION OF TOTAL FOREIGN INVESTMENT I.E. DIRECT AND INDIRECT FOREIGN INVESTMENT IN INDIAN COMPANIES. 4.1.1 Investment in Indian companies can be made both by non-resident as well as resident Indian entities. Any non-resident investment in an Indian company is d....
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....ctly for those cases where the entire capital of the downstream subsidy is owned by the holding company. Illustration To illustrate, if the indirect foreign investment is being calculated for Company X which has investment through an investing Company Y having foreign investment, the following would be the method of calculation: (A) where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y. (B) where Company Y has foreign investment of say 75% and: (I) invests 26% in Company X, the entire 26% investment by Company Y would be treated as indirect foreign investment in Company X; (II) Invests 80% in Company X, the indirect foreign investment in Company X would be taken as 80% (III) where Company X is a wholly owned subsidiary of Company Y (i.e. Company Y owns 100% shares of Company X), then only 75% would be treated as indirect foreign equity and the balance 25% would be treated as resident held equity. The indirect foreign equity in Company X would be computed in the ratio of 75: 25 in the total investment of Company Y in Company X. (iii)The total foreign investment would be the su....
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.... (bb) A group of Indian companies under the same management and ownership control. 28 (B) For the purpose of this Clause, “Indian company" shall be a company which must have a resident Indian or a relative as defined under Section 6 of the Companies Act, 1956/ HUF, either singly or in combination holding at least 51% of the shares. (C) Provided that, in case of a combination of all or any of the entities mentioned in Sub-Clauses (i) and (ii) of clause 4.1.3(v)(d)(1) above, each of the parties shall have entered into a legally binding agreement to act as a single unit in managing the matters of the applicant company. (e) If a declaration is made by persons as per section 187C of the Indian Companies Act about a beneficial interest being held by a non resident entity, then even though the investment may be made by a resident Indian citizen, the same shall be counted as foreign investment. 4.1.4 The above mentioned policy and the methodology would be applicable for determining the total foreign investment in all sectors, excepting in sectors where it is governed specifically under any statutes or rules there under. The above methodology of determining direct an....
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..../ trademark partner, would lie equally on the non-resident investor/ technology supplier and the Indian partner. 4.2.2.3 The following investments, however, will be exempt from the requirement of Government approval even though the non-resident investor may be having a joint venture or technology transfer/ trademark agreement in the same field: 3 (a) Investments to be made by Venture Capital Fund registered with the Securities and Exchange Board of India (SEBI); or (b) Investments by Multinational Financial Institutions like Asian Development Bank(ADB), International Finance Corporation(IFC), Commonwealth Finance Corporation (CDC), Deutsche Entwicklungs Gescelschaft (DEG) etc.; or (c) where in the existing joint venture, investment by either of the parties is less than 3 per cent; or (d) where the existing joint venture / collaboration is defunct or sick; or DIPP has released a Discussion paper calling for views/suggestions from the stakeholders to review the extant policy on subjecting investment to the ‘Existing Venture/ tie-up condition' 30 30 4.2.2.4 (e) for issue of shares of an Indian company engaged in Information Technology sector or in the minin....
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....ly, mandatorily & compulsorily convertible preference shares/debentures, regardless of whether the said investments have been made under Schedule 1, 2, 3 and 6 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. 4.3 CAPS ON INVESTMENTS 4.3.1 Investments can be made by non-residents in the capital of a resident entity only to the extent of the percentage of the total capital as provided/permitted in the FDI policy. Thus while investment are prohibited in some sectors/activities, there are restrictions/conditions/caps on the investment in certain other sector/activities. The caps in various sector(s)/activity are detailed out in Chapter 5 of this circular. 4.4 ENTRY CONDITIONS ON INVESTMENT 4.4.1 Investments can be permitted to be made by non-residents in the capital of a resident entity in certain sectors/activity with entry conditions. These entry conditions would be applicable for investment only by non-resident entities. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this circular. 4.5 OTHER CONDITIONS ON INVESTME....
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.... operating companies: Foreign investment in such companies would have to comply with the relevant sectoral conditions on entry route, conditionalities and caps with regard to the sectors in which such companies are operating. (ii) Operating-cum-investing companies: (a) Foreign investment into such companies would have to comply with the relevant sectoral conditions on entry route, conditionalities and caps with regard to the sectors in which such companies are operating. 33 33 (b) Further, the subject Indian companies into which downstream investments are made by such companies would have to comply with the relevant sectoral conditions on entry route, conditionalities and caps in regard of the sector in which the subject Indian companies are operating. (iii) Investing companies: (a) Foreign Investment in Investing Companies will require the prior Government/FIPB approval, regardless of the amount or extent of foreign investment. (b) The Indian companies into which downstream investments are made by such investing companies would have to comply with the relevant sectoral conditions on entry route, conditionalities and caps in regard of the sector in which the sub....
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....thirty (30) days for communicating Government decision. 4.7.4 In cases in which either the proposal is not cleared or further information is required in order to obviate delays presentation by applicant in the meeting of the FIPB should be resorted to. 4.7.5 While considering cases and making recommendations, FIPB should keep in mind the sectoral requirements and the sectoral policies vis-Ã -vis the proposal (s). 4.7.6 FIPB would consider each proposal in its totality 4.7.7 The Board should examine the following while considering proposals submitted to it for consideration. (i) whether the items of activity involve industrial licence or not and if so the considerations for grant of industrial licence must be gone into; (ii) whether the proposal involves any export projection and if so the items of export and the projected destinations. (iii)Whether the proposal has any strategic or defence related considerations. 4.7.8 While considering proposals the following may be prioritised. (i) Items falling in infrastructure sector. (ii) Items which have an export potential. (iii)Items which have large scale employment potential and especially for rural people. (iv) Items....
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....prohibit changes in general policies and, regulations applicable to the industrial sector. 36 4.8 4.8.1 CONSTITUTION OF FIPB : FIPB comprises of the following Core Group of Secretaries to the Government of India: (i) Secretary to Government, Department of Economic Affairs, Ministry of Finance - Chairperson (ii) Secretary to Government, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry (iii)Secretary to Government, Department of Commerce, Ministry of Commerce & Industry (iv) Secretary to Government, Economic Relations, Ministry of External Affairs (v) Affairs. Secretary to Government, Ministry of Overseas Indian 4.8.2 The Board would be able to co-opt other Secretaries to the Central Government and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary. 4.9 APPROVAL LEVELS FOR CASES UNDER GOVERNMENT ROUTE 4.9.1 The following approval levels shall operate for proposals involving FDI under the Government route i.e. requiring prior Government approval: (i) The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with tot....
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.... (e) Nidhi company (f) Trading in Transferable Development Rights (TDRs) (g) Real Estate Business or Construction of Farm Houses (h) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (i) Activities / sectors not opened to private sector investment including Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). Besides foreign investment in any form, foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also completely prohibited for Lottery Business and Gambling and Betting activities. 5.2 SECTOR-SPECIFIC POLICY FOR FDI In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed/permitted subject to other conditions indicated & security conditions where applicable. In sectors/activities not listed below, FDI is permitted upto 100% on the automatic route, subject to applicable laws/sectoral rules/regulations/security conditions. % of FDI Entry Route Cap/Equity Sl.No. Sector/Activity AGRICULTURE 5.2.1 Agriculture & Animal Husbandry Floriculture, Horticulture, 100% Devel....
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....oly houses is also be included in this category. ■In case of Animal Husbandry, scope of the term 'under controlled conditions' includes - • • Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will (ventilation, require climate systems temperature/humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems. Poultry breeding farms and hatcheries where micro- climate is controlled through advanced technologies like incubators, ventilation systems etc. ■In the case of pisciculture and aquaculture, ‘under controlled conditions' includes - • Aquariums • Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an enclosed environment with artificial climate control. 5.2.2 Tea Plantation 5.2.2.1 Tea sector including tea plantations 100% Government Note: Besides the above, FDI is not allowed in any other plantation sector/activity Other conditions: Compulsory divestment of 26% equity of the company in favour of an Indian partner/Indian public within a period of 5 years ....
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....ding Foreign Direct Investment (FDI), was permitted in mining and production of Titanium ores (Ilmenite, Rutile and Leucoxene) and Zirconium minerals (Zircon). Vide Notification No. S.O.61(E) dated 18.1.2006, the Department of Atomic Energy re-notified the list of “prescribed substances†under the Atomic Energy Act 1962. Titanium bearing ores and concentrates (Ilmenite, Rutile and Leucoxene) and Zirconium, its alloys and compounds and minerals/concentrates including Zircon, were removed from the list of "prescribed substances". (i) FDI for separation of titanium bearing minerals & ores will be subject to the following additional conditions viz.: (A) value addition facilities are set up within India along with transfer of technology; (B) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987. (ii) FDI will not be allowed in mining of “prescribed substances" listed in the Notification No. S.O. 61(E) dated 18.1.2006 issued by the D....
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....FDI Entry Route Cap/Equity & Industry, in consultation with Ministry of Defence. (ii) Cases involving FDI will be considered by the FIPB and licences given by the Department of Industrial Policy & Promotion in consultation with Ministry of Defence. (iii)The applicant should be an Indian company / partnership firm. (iv) The management of the applicant company / partnership should be in Indian hands with majority representation on the Board as well as the Chief Executives of the company / partnership firm being resident Indians. (v) Full particulars of the Directors and the Chief Executives should be furnished along with the applications. (vi) The Government reserves the right to verify the antecedents of the foreign collaborators and domestic promoters including their financial standing and credentials in the world market. Preference would be given to original equipment manufacturers or design establishments, and companies having a good track record of past supplies to Armed Forces, Space and Atomic energy sections and having an established R & D base. (vii) There would be no minimum capitalization for the FDI. A proper assessment, however, needs to be done by t....
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....nufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of the Ministry of Home Affairs and State Governments with the prior approval of the Ministry of Defence. No such item should be sold within the country to any other person or entity. The export of manufactured items would 46 46 Sl.No. Sector/Activity 5.2.6 % of FDI Entry Route Cap/Equity be subject to policy and guidelines as applicable to Ordnance Factories and Defence Public Sector Undertakings. Non-lethal items would be permitted for sale to persons / entities other than the Central of State Governments with the prior approval of the Ministry of Defence. Licensee would also need to institute a verifiable system of removal of all goods out of their factories. Violation of these provisions may lead to cancellation of the licence. (xvi) Government decision on applications to FIPB for FDI in defence industry sector will be normally communicated within a time frame of 10 weeks from the date of acknowledgement. POWER Electric Generation, Transmission, Distribution and Trading 5.2.6.1 i) Generation and transmission 100%....
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.... air transport service", means an air transport service undertaken between the same two or more places and operated 48 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public. (viii) “Non-Scheduled Air Transport service†means any service which is not a scheduled air transport service and will include Chartered and Cargo airlines. (ix) "Chartered" and "Cargo" airlines would mean such airlines which meet the conditions as given in the Civil Aviation Requirements issued by the Ministry of Civil Aviation. (x) "Seaplane" means an aeroplane capable normally of taking off from and alighting solely on water; (xi)"Ground Handling†means (i) ramp handling, (ii) traffic handling both of which shall include the activities as specified by the Ministry of Civil Aviation through the Aeronautical Information Circulars from time to time, and (iii) any other activity specified by the Central Government to be a part of either ramp handling or traffic handling. Policy for FDI in....
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....nvestments have to be strictly in the nature of FDI. Investments by FIIs are not permitted in the equity capital of ARCs. 50 50 Sl.No. Sector/Activity % of Cap/Equity FDI Entry Route (ii) However, FIIs registered with SEBI can invest in the Security Receipts (SRS) issued by ARCs registered with Reserve Bank. FIIs can invest upto 49 per cent of each tranche of scheme of SRs, subject to the condition that investment by a single FII in each tranche of SRs shall not exceed 10 per cent of the issue. (iii) Any individual investment of more than 10% would be subject to provisions of section 3(3) (f) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 5.2.9 Banking -Private sector 5.2.9.1 Banking -Private sector 74% including Automatic up investment by FIIS to 49% Government route beyond 49% and up to 74% 5.2.9.2 Other conditions: (1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by FIIS, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR/ADRs and acquisition of shares from existing shareholders....
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....to apply. (f) RBI guidelines relating to acquisition by purchase or otherwise of shares of a private bank, if such acquisition results in any person owning or controlling 5 per cent or more of the paid up capital of the private bank will apply to non-resident investors as well. (ii) Setting up of a subsidiary by foreign banks (a) Foreign banks will be permitted to either have branches or subsidiaries but not both. 52 52 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity 5.2.10 (b) Foreign banks regulated by banking supervisory authority in the home country and meeting Reserve Bank's licensing criteria will be allowed to hold 100 per cent paid up capital to enable them to set up a wholly-owned subsidiary in India. (c) A foreign bank may operate in India through only one of the three channels viz., (i) branches (ii) a wholly-owned subsidiary and (iii) a subsidiary with aggregate foreign investment up to a maximum of 74 per cent in a private bank. (d) A foreign bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank will be permitted ....
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....Hub/teleport) and again uplinked to a satellite after encryption of channel. At the cable headend these encrypted pay channels are downlinked using a single satellite antenna, transmodulated and sent to the subscribers by using a land based transmission system comprising of infrastructure of cable/optical fibres network. to 49% FDI limit in (HITS) Broadcasting 74% (total direct and Automatic up Service is subject to such indirect foreign guidelines/terms and conditions as investment including specified from time to time by portfolio and FDI) Ministry of Information and Broadcasting. Government route beyond 49% and up to 74% 5.2.11.5 Setting up hardware facilities such as up-linking, HUB etc. (1) Setting up of Up-linking HUB/ | 49% (FDI & FII) Government Teleports (2) Up-linking a Non-News & 100% Government Current Affairs TV Channel (3) Up-linking a News & Current 26% (FDI & FII) Affairs TV Channel subject to the Government 54 Sl.No. Sector/Activity condition that the portfolio investment from FII/ NRI shall not be "persons acting in concert" with FDI investors, as defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations,....
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....ent Scheme (PIS) will be limited to 23% and Investment under FDI Scheme limited to 26% ] 5.2.12.3 Other conditions: (i) (ii) 5.2.13 5.2.13.1 FII purchases shall be restricted to secondary market only and No non-resident investor/ entity, including persons acting in concert, will hold more than 5% of the equity in these companies. Development of Townships, Housing, Built-up infrastructure and Construction-development projects Townships, housing, built-up 100% infrastructure and construction- development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure) Automatic 56 56 Sl.No. 5.2.13.2 Sector/Activity % of FDI Entry Route Cap/Equity Investment to be made will be subject to the following conditions: (1) Minimum area to be developed under each project would be as under: (i) In case of development of serviced housing plots, a minimum land area of 10 hectares (ii) In case of construction-development projects, a minimum built-up area of 50,000 sq.mts (iii) In case of a combination project, any....
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....nce of the above conditions by the developer. Note: (i) The conditions at (1) to (4) above would not apply to Hotels & Tourism, Hospitals and SEZ's. (ii) For investment by NRIs, the conditions at (1) to (4) above would not apply. (iii) 100% FDI is allowed under the automatic route in development of Special Economic Zones (SEZ) without the conditionalities at (1) to (4) above. This will be subject to the provisions of Special Economic Zones Act 2005 and the SEZ Policy of the Department of Commerce. (iv) FDI is not allowed in Real Estate Business. Credit Information Companies 5.2.14 (CIC) 5.2.14.1 Credit Information Companies 5.2.14.2 Other Conditions: 49% (FDI & FII) Government (1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005. 58 Sl.No. 5.2.15 5.2.15.1 Sector/Activity % of FDI Entry Route Cap/Equity (2) Foreign investment is permitted under the Government route, subject to regulatory clearance from RBI. (3) Investment by a registered FII under the Portfolio Investment Scheme would be permitted up to 24% only in the CICs listed at the Stock Exchanges, within the overall limi....
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....lishing, consultancy and supply, data processing, database activities and distribution of electronic content, other computer related activities, Research and experimental development on natural sciences and engineering, Business and management consultancy activities and Architectural, engineering and other technical activities. 5.2.15.2 FDI in Industrial Parks would not be subject to the conditionalities applicable for construction development projects etc. spelt out in para 5.2.13 above, provided the Industrial Parks meet with the under-mentioned conditions: (i) it would comprise of a minimum of 10 units and no single unit shall occupy more than 50% of the allocable area; the minimum percentage of the area to be allocated for industrial activity shall not be less than 66% of the total allocable area. 60 60 Sector/Activity % Sl.No. Insurance 5.2.16 5.2.16.1 Insurance 5.2.16.2 Other Conditions: of FDI Entry Route Cap/Equity 26% Automatic 5.2.17 5.2.17.1 5.2.17.2 5.2.17.2.1 5.2.18 (1) FDI in the Insurance sector, as prescribed in the Insurance Act, 1999, i allowed under the automatic route. is (2) This will be subject to the condition that Compani....
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....und based activities: US $0.5 million to be brought upfront for all permitted non-fund based NBFCs irrespective of the level of foreign investment subject to the following condition: It would not be permissible for such a company to set up any subsidiary for any other activity, nor it can participate in any equity of an NBFC holding/operating company. Note: The following activities would be classified as Non-Fund Based activities: (a) Investment Advisory Services (b) Financial Consultancy (c) Forex Broking (d) Money Changing Business (e) Credit Rating Agencies (vii) This will be subject to compliance with the guidelines of RBI. Note: Credit Card business includes issuance, sales, marketing & design of various payment products such as credit cards, charge cards, debit cards, stored value cards, smart card, value added cards etc. (2) Venture Capital Fund (VCF) A Foreign Venture Capital Investor(FVCI) may contribute upto 100% of the capital of an Indian Venture Capital Undertaking and may also set up a domestic asset management company to manage the fund. All such investments can be made under automatic route in terms of Schedule 6 to Notification No. FEMA 20. A ....
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.... with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. % Cap/Equity Publication of facsimile edition of 100% foreign newspapers 5.2.20.4.1 Other Conditions: Government 5.2.21 5.2.21.1 (i) FDI should be made by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India. (ii) Publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisions of the Companies Act, 1956. (iii) Publication of facsimile edition of foreign newspaper would also be subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information & Broadcasting on 31.3.2006, as amended from time to time. Security Agencies in Private sector The ‘Private Security Agencies (Regulation) Act, 2005' regulates the operations of private security agencies. Under Section 6(2) of the above Act, "A company, firm or an association of persons shall not be cons....
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....ctor/Activity % of FDI Entry Route Cap/Equity countries of concern and/or unfriendly entities. (iv) The investment approval by FIPB shall envisage the conditionality that Company would adhere to licence Agreement. (v) FDI shall be subject to laws of India and not the laws of the foreign country/countries. (2) Security Conditions: (i) The Chief Officer In-charge of technical network operations and the Chief Security Officer should be a resident Indian citizen. (ii) Details of infrastructure/network diagram (technical details of the network) could be provided on a need basis only to telecom equipment suppliers/manufacturers and the affiliate/parents of the licensee Clearance from the licensor (Department of Telecommunications) would be required if such information is to be provided to anybody else. company. (iii)For security reasons, domestic traffic of such entities as may be identified /specified by the licensor shall not be hauled/routed to any place outside India. (iv) The licensee company shall take adequate and timely measures to ensure that the information transacted through a network by the subscribers is secure and protected. (v) The officers/officia....
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....he designated security agency/licensor in which a mirror image of the remote access information is available on line for monitoring purposes. (xv) Complete audit trail of the remote access activities pertaining to the network operated in India should be maintained for a period of six months and provided on request to the licensor or any other agency authorised by the licensor. (xvi) The telecom service providers should ensure that necessary provision (hardware/software) is available in their equipment for doing the Lawful interception and monitoring from a centralized location. (xvii) The telecom service providers should familiarize/train Vigilance Technical Monitoring (VTM)/security agency officers/officials in respect of relevant operations/features of their systems. (xviii) It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security angle. (xix) In order to maintain the privacy of voice and data, monitoring shall only be upon authorisation by the Union Home Secretary or Home Secretaries of the States/Union Territories. (xx) For monitoring traffic, the licensee company shall provide access of....
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....d related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption. The yardstick to determine whether the sale is wholesale or not would be the type of customers to whom the sale is made and not the size and volume of sales. Wholesale trading would include resale, processing and thereafter sale, bulk imports with ex-port/ex-bonded warehouse business sales and B2B e-Commerce. 5.2.24.1.2 Guidelines for Cash & Carry Wholesale Trading/Wholesale Trading (WT): (a) For undertaking WT, requisite licenses/registration/ permits, as specified under the relevant Acts/Regulations/Rules/Orders of the State Government/Government Body/Government Authority/Local Self-Government Body under that State Government should be (b) obtained. Except in case of sales to Government, sales made by the wholesaler would be considered as 'cash & carry wholesale trading/wholesale trading' with valid business customers, only when WT are made to the following entities: (I) Entities holding sales tax/ VAT registration/service tax/excise duty registration; or (II) ....
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....ct tradingÊ» % of FDI Entry Route Cap/Equity 51% Government (1) Foreign Investment in Single Brand product trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices. (2) FDI in Single Brand products retail trade would be subject to the following conditions: (a) Products to be sold should be of a ‘Single Brand' only. (b) Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India. (c) 'Single Brand' product-retailing would cover only products which are branded during manufacturing. (3) Application seeking permission of the Government for FDI in retail trade of 'Single Brand' products would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion. The application would specifically indicate the product/ product categories which are proposed to be sold under a â€....
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....nding up the company or the official liquidator in case of voluntary winding up under the provisions of the Companies Act, 1956. AD Category – I banks shall allow the remittance provided the applicant submits: - a. No objection or Tax clearance certificate from Income Tax Department for the remittance. b. Auditor's certificate confirming that all liabilities in India have been either fully paid or adequately provided for. C. Auditor's certificate to the effect that the winding up is in accordance with the provisions of the Companies Act, 1956. d. In case of winding up otherwise than by a court, an auditor's certificate to the effect that there are no legal proceedings pending in any court in India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance. 75 6.1.2 Repatriation of Dividend: Dividends are freely repatriable without any restrictions (net after Tax deduction at source or Dividend Distribution Tax, if any, as the case may be). The repatriation is governed by the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 6.1....
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....f consideration. Note: For companies with paid up capital with less than Rs.5 crore, the above mentioned certificate can be given by a practicing company secretary. (b) A certificate from Statutory Auditor or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. (c) The report of receipt of consideration as well as Form FC-GPR have to be submitted by the AD Category-I bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the registered office of the company is situated. - (d) Part B of Form FC-GPR should be filed on an annual basis by the Indian company, directly with the Reserve Bank. This is an annual return to be submitted by 31st of July every year, pertaining to all investments by way of direct/portfolio investments/reinvested earnings/other capital in the Indian company made during the previous years (i.e. the information in Part B submitted by 31st July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the company which is outstanding....
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....etails of such issue in the Form enclosed as Annex-8, within 30 days from the date of closing of the issue. The company should also furnish a quarterly return in the Form enclosed as Annex - 9, to the Reserve Bank within 15 days of the close of the calendar quarter. The quarterly return has to be submitted till the entire amount raised through ADR/GDR mechanism is either repatriated to India or utilized abroad as per the extant Reserve Bank guidelines. 6.3 ADHERENCE TO GUIDELINES/ORDERS AND CONSEQUENCES OF VIOLATION FDI is a capital account transaction and thus any violation of FDI regulations are covered by the penal provisions of the FEMA. Reserve Bank of India administers the 78 FEMA and Directorate of Enforcement under the Ministry of Finance is the authority for the enforcement of FEMA. The Directorate takes up investigation in any contravention of FEMA. 6.3.1 Penalties (i) If a person violates/contravenes any FDI Regulations, by way of breach/non- adherence/non-compliance/contravention of any rule, regulation, notification, press note, press release, circular, direction or order issued in exercise of the powers under FEMA or contravenes any conditions subj....
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....rity' an officer either from Enforcement Directorate or Reserve Bank of India for any person contravening any provisions of the FEMA. The Compounding Authorities are authorized to compound the amount involved in the contravention to the Act made by the person. No contravention shall be compounded unless the amount involved in such contravention is quantifiable. Any second or subsequent contravention committed after the expiry of a period of three years from the date on which the contravention was previously compounded shall be deemed to be a first contravention. The Compounding Authority may call for any information, record or any other documents relevant to the compounding proceedings. The Compounding Authority shall pass an order of compounding after affording an opportunity of being heard to all the concerns as expeditiously and not later than 180 days from the date of application made to the Compounding Authority. Compounding Authority shall issue order specifying the provisions of the Act or of the rules, directions, requisitions or orders made there under in respect of which contravention has taken place along with details of the alleged contraventions. 80 80 ....
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....ase specify) Type of security issued No. Nature of security 01 Equity 02 Compulsorily Convertible Debentures 03 Compulsorily Convertible Preference shares 04 Others (please specify) Total Date of issue Number of shares/ convertible debentures Number Maturity Face value Premium Issue Price per share Amount of inflow* i) In case the issue price is greater than the face value please give break up of the premium received. ii) * In case the issue is against conversion of ECB or royalty or against import of capital goods by units in SEZ, a Chartered Accountant's Certificate certifying the amount outstanding on the date of conversion (á) Break up of premium Control Premium Non competition fee Others@ Total Amount @ please specify the nature (d) Total inflow (in Rupees) on account of issue of shares / convertible debentures to non-residents (including premium, if any) vide (i) Remittance through AD: (ii) Debit to NRE/FCNR A/c with 83 Bank (iii) Others (please specify) Date of reporting of (i) and (ii) above to RBI under Para 9 (1) A of Schedule | to Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to ti....
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....ation 6 of the RBI Notification No FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time. OR Shares issued are bonus. OR Shares have been issued under a scheme of merger and amalgamation of two or more Indian companies or reconstruction by way of de-merger or otherwise of an Indian company, duly approved by a court in India. OR Shares are issued under ESOP and the conditions regarding this issue have been satisfied 85 55 3. Shares have been issued in terms of SIA/FIPB approval No. dated 4. We enclose the following documents in compliance with Paragraph 9 (1) (B) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000: (i) (ii) A certificate from our Company Secretary certifying that (a) (b) (c) (d) all the requirements of the Companies Act, 1956 have been complied with; terms and conditions of the Government approval, if any, have been complied with; the company is eligible to issue shares under these Regulations; and the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB date....
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....in Part B submitted by 31st July 2008 will pertain to all the investments made in the previous years up to March 31, 2008). The details of the investments to be reported would include all foreign investments made into the company which is outstanding as on the date of the balance sheet. The details of overseas investments in the company both under Direct portfolio investment may be separately indicated. Please use end-March Market prices/exchange rates for compiling the relevant information. Permanent Account Number (PAN) of the investee company given by the Income Tax Department No. 1. Name Address Particulars State Registration No. given by the (In Block Letters) Registrar of Companies 2. Name of the Contact Person: Designation: Tel. E-mail: Fax: 3. Account closing date: 4. Details of changes if any, with regard to information furnished earlier (Change in name of company / Change of location, activities, etc.) Whether listed company or 5. unlisted company Listed/Unlisted 88 5.1 If listed, i) Market value per share as at end-March ii) Net Asset Value per share as on date of latest Audited Balance Sheet 5.2 If unlisted, Net Asset Value per ....
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....ial Derivatives (notional value) 9. Other Investment 9.1 Trade Credit 9.1.1 Short Term 9.1.2 Long Term 9.2 00 Loans 9.3 Others 9.3.1 Short Term 9.3.2 Long Term Please see the note below 00 Note: As the details of the Loans availed of by your company are collected through Authorised Dealers separately by Foreign Exchange Department of the Reserve Bank in ECB returns, the details of external loans availed by your company need not be filled in. However, the external loans extended by your company to non-resident enterprises other than WOS/JVs outside India should be reported under "Foreign Assets outside India". 90 06 10. Shareholding pattern as at end- March Equity Investor category / Nature of investing entity a) Non-Resident Individuals 01 02 Companies 03 Fils 04 FVCIS 05 Foreign Trusts 06 Private Equity Funds 07 No. of shares Amount (Face Value) Rs. 09 Pension/ Provident Funds 08 Sovereign Wealth Fund (SWF)⹠Partnership / Proprietorship Firms 10 Financial Institutions 11 NRIS/PIO 12 Others (please specify) Sub Total b) Resident Total 11. Persons employed during the financial year ending March 31Ⓡ Directly I....
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....under the SEBI guidelines ' as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares, (b) not listed on a recognized stock exchange in India, shall not be less than the fair value to be determined by a SEBI registered Category | Merchant Banker or a Chartered Accountant as per the discounted free cash flow method. The price per share arrived at should be certified by a SEBI registered Category I Merchant Banker or a Chartered Accountant. 92 2.3 Transfer by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FII) to Resident Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B (2) of Notification No. FEMA 20/2000-RB dated May 3, 2000 which shall not be more than the minimum price at which the transfer of shares can be made from a resident to a non-resident as given at para 2.2 above. 3. Responsibilities / Obligations of the parties All the parties involved in the transaction would have the responsibility to ensure that the relevant regulations under FEMA are complied with an....
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....Sale Agreement, letters exchanged to this effect may be kept on record. Where Consent Letter has been signed by their duly appointed agent, the Power of Attorney Document executed by the seller/buyer authorizing the agent to purchase/sell shares. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India showing equity participation of residents and non-residents category-wise (i.e. NRIS/OCBs/foreign nationals/incorporated non-resident entities/FIls) and its percentage of paid up capital obtained by the seller/buyer or their duly appointed agent from the company, where the sectoral cap/limits have been prescribed. Certificate indicating fair value of shares from a Chartered Accountant. Copy of Broker's note if sale is made on Stock Exchange Undertaking from the buyer to the effect that he is eligible to acquire shares/ convertible debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. Undertaking from the FII/sub account to the effect that the individual FII/ Sub account ceiling as prescribed by SEBI has not been breached. For sale of shares by a person r....
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....en made by the transferee. On receipt of the certificate from the AD, the company may record the transfer in its books. 6.3 The actual inflows and outflows on account of such transfer of shares shall be reported by the AD branch in the R-returns in the normal course. 6.4 In addition the AD branch should submit two copies of the Form FC-TRS received from their constituents/customers together with the statement of inflows/outflows on account of remittances received/made in connection with transfer of shares, by way of sale, to IBD/FED/or the nodal office designated for the purpose by the bank in the 10 To the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Mumbai 95 enclosed proforma (which is to be prepared in MS-Excel format). The IBD/FED or the nodal office of the bank will in turn submit a consolidated monthly statement in respect of all the transactions reported by their branches together with copies of the FC-TRS Forms received from their branches to Foreign Exchange Department, Reserve Bank, Foreign Investment Division, Central Office, Mumbai in soft copy (in MS- Excel) by e-mail ....
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....ed to be a relative of another, if, and only if: (a) they are members of a Hindu undivided family; or (b) they are husband and wife ; or (Para) (c) the one is related to the other in the manner indicated in Schedule IA (as under) 1. Father. 2. Mother (including step-mother). 3. Son (including stepson). 4. Son's wife. 5. Daughter (including step-daughter). 6. Father's father. 7. Father's mother. 8. Mother's mother. 9. Mother's father. 10. Son's son. 11. Son's son's wife. 12. Son's daughter. 13. Son's daughter's husband. 14. Daughter's husband. 15. Daughter's son. 16. Daughter's son's wife. 17. Daughter's daughter. 18. Daughter's daughter's husband. 19. Brother (including step-brother). 20. Brother's wife. 21. Sister (including step-sister). 22. Sister's husband. ***************************** 96 98 Annex - 5 Report by the Indian company receiving amount of consideration for issue of shares/Convertible debentures under the FDI Scheme [Para ] ( To be filed by the company through its Authorised Dealer Category - I bank, with the Regional Office of the Reserve Bank under whose jurisdiction the Registered Office of the company making the declaration is....
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....y and mandatorily convertible preference shares / debentures by a person resident in India i. ii. iii. iv. V. vi. vii. viii. Consent Letter duly signed by the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India. Certificate indicating fair value of shares from a Chartered Accountant. Copy of Broker's note if sale is made on Stock Exchange. Declaration from the buyer to the effect that he is eligible to acquire shares / compulsorily and mandatorily convertible preference shares / debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. Declaration from the FII/sub account to the effect that the individual FII / Sub account ceiling as prescribed has not been breached. Additional documents in respect of sale of shares / compulsorily and mandatorily convertible preference shares / debentures by a person resident outside India If the sellers are NRIs/OCBs, the copies of RBI approvals, if applicable, evidencing the shares held by them on repatriati....
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.... Accountants */ ** Valuation report (CA Certificate to be attached) After the transfer Declaration by the transferor / transferee I/We hereby declare that : i. The particulars given above are true and correct to the best of my/our knowledge and belief. ii. iii. iv. I/ We, was/were holding the shares compulsorily and mandatorily convertible preference shares / debentures as per FDI Policy under FERA/ FEMA Regulations on repatriation/non repatriation basis. I/ We, am/are eligible to acquire the shares compulsorily and mandatorily convertible preference shares / debentures of the company in terms of the FDI Policy. It is not a transfer relating to shares compulsorily and mandatorily convertible preference shares / debentures of a company engaged in financial services sector or a sector where general permission is not available. The Sectoral limit under the FDI Policy and the pricing guidelines have been adhered to. Signature of the Declarant or his duly authorised agent Date: Note: In respect of the transfer of shares / compulsorily and mandatorily convertible preference shares/compulsorily and mandatorily convertible debentures from resident to non reside....