TaxTMI 
TaxTMI 
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) ( Second Amendment) Regulations, 2003
X X X X Extracts X X X X
X X X X Extracts X X X X
....ulations, 2003. (ii) They shall come into force from the date of their publication in the Official Gazette. Amendment of the Regulations :- 2. In the Foreign Exchange Management( Transfer or Issue of Security by a person Resident outside India) Regulations, 2000, In Regulation 2, after item (vii), the following item shall be inserted, namely:- (vii) (a) ' Non-resident Indian (NRI) shall have the meaning assigned to it in clause (iv) of Regulation 2 of the Foreign Exchange Management (Investment in Firm or Proprietary Concern in India) Regulations, 2000.' in item (viii), the words ' Non-resident Indian (NRI)' shall be deleted; B. After Regulation 6, the following Regulations shall be inserted, namely:- ' 6A. Acquisition of Bonus shares :- An Indian company may issue bonus shares to its non-resident shareholders, subject to the following conditions: a. the shares against which bonus shares are issued by the company ( hereinafter referred to as 'the original shares') were acquired or held by the non-resident shareholder in accordance with the Rules/ Regulations applicable to such acquisition; b. the bonus shares acquired by the non-resident shareholder sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew paragraph shall be inserted, namely; 5A. Issue price of ADRs/GDRs Price of ADRs/GDRs to be issued to a person resident outside India may be decided by the Indian company- a. where the issue is on public offer basis, in consultation with the Lead Manager to the issue; and b. in other cases , as provided in paragraph 5 above.' c. In paragraph 6, in clause (a), after sub-clause (ii), the following shall be added, namely: to obligations arising out of dividends declared/remitted after 14^th July 2000 i.e. the date on which conditions of dividend balancing was withdrawn' In paragraph 6, the existing sub-clause (b) shall be deleted Annexure A may be substituted with amended Annexure 'A' Annexure B may be substituted with amended Annexure 'B' Annexure C may be substituted with amended Annexure 'C': Annexure D may be substituted with amended Annexure 'D' The existing Form FC-GPR shall be substituted with the amended Form FC-GPR. In Schedule 2, In Paragraph 1), for sub-paragraph (5), the following shall be substituted, namely :- '(5) A registered FII is permitted to purchase shares/convertible debentures of an Indian company through offer/private....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evelopment Corporation (CDC), Deutsche Entwicklungs Gescelscchaft(DEG) and transfer of shares of an Indian company engaged in Information Technology sector. (Usha Thorat) Executive Director Annexure A (See paragraph 2) (A) List of Activities for which Automatic Route of RBI for investment from person resident outside India is not available • Domestic Airlines • Petroleum Sector (except for private sector oil refining) • Investing companies in Infrastructure & Services Sector • Defence and Strategic Industries • Atomic Minerals • Print Media • Broadcasting • Postal services • Courier Services • Establishment and Operation of satellite • Development of Integrated Township • Tea Sector (B) List of activities or items for which FDI is prohibited. • Retail Trading • Atomic Energy • Lottery Business • Gambling and Betting • Housing and Real Estate business • Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(b)(I) and (b)(ii) above. f) FDI in the NBFC sector is put on automatic route subject to compliance with guidelines of the Reserve Bank of India. RBI would issue appropriate guidelines in this regard 3. Insurance 26% FDI upto 26% in the Insurance sector is allowed on the automatic route subject to obtaining licence from Insurance Regulatory & Development Authority(IRDA) 4. Telecommuni -cations 49 % • In basic, Cellular, Value Added Services, and Global Mobile Personal Communications by Satellite, FDI is limited to 49% subject to licencing and security requirements and adherence by the companies (who are investing and the companies in which the investment is being made ) to the license conditions for foreign equity cap and lock-in period for transfer and addition of equity and other license provisions. • ISPs with gateways, radio paging and end-to-end bandwidth, FDI is permitted upto74% with FDI, beyond 49% requiring Government approval. These services would be subject to licensing and security requirements • No equity cap is applicable to manufacturing activities. • FDI upto 100% is allowed for the following a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y(VCC) Offshore Venture Capital Funds/ companies are allowed to invest in domestic venture capital undertaking as well as other companies through the automatic route, subject only to SEBI regulations and sector specific caps on FDI. 9. Trading Trading is permitted under automatic route with FDI upto 51% provided it is primarily export activities, and the undertaking is an export house/ trading house / super trading house/ star trading house. However, under the FIPB route: (i) 100% FDI is permitted in case of trading companies for the following activities: • exports; • bulk imports with export/ ex-bonded warehouse sales; • cash and carry wholesale trading; • other import of goods or services provided at least 75% is for procurement and sale of the same group and not for third party use or onward transfer/ distribution/sales. ii) The following kinds of trading are also permitted , subject to provisions of Exim Policy. • Companies for providing after sales services( that is not trading per se) • Domestic trading of products of JVs is permitted at the wholesale level for suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports and health units for tourists and Convention/Seminar units and organisations. For foreign technology agreements, automatic approval is granted if • Upto 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architects, design, supervision, etc. • Upto 3% of the net turnover is payable for franchising and marketing/publicity support fee, and Upto 10% of gross operating profit is payable for management fee, including incentive fee. 14.Mining 74 % 100 % • For exploration and mining of diamonds and precious stones FDI is allowed upto 74 % under automatic route • For exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing FDI is allowed upto 100 % under automatic route • Press Note 18 (1998 series) dated 14/12/98 would not be applicabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 10. Details of FIPB approval (Please quote the relevant NIC Code if the GDRs are being issued under the Automatic Route) : 11. Whether any overall sectoral cap for foreign investment is applicable. If yes, please give details. : 12. Details of the Equity Capital (a) Authorised Capital (b) Issued and Paid-up Capital • Held by persons Resident in India • Held by foreign Investors other than FIIs/NRIs/PIOs/OCBs (A list of foreign investors holding more than 10 per cent of the paid-up capital and number of shares held by each of them should be furnished) • Held by NRIs/PIOs/OCBs • Held by FIIs. Total Equity held by non -residents (c) Percentage of equity held by non-residents to total paid-up capital : Before Issue After Issue 13. Whether issue was on private placement basis. If yes, please give details of the investors and ADRs/GDRs issued to each of them. : 14. Number of GDRs/ADRs issued : 15. Ratio of GDRs/ADRs to underlying shares : ....