TaxTMI 
TaxTMI 
Consolidated FDI Policy
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....owth. Foreign Direct Investment, as distinguished from portfolio investment, has the connotation of establishing a 'lasting interest' in an enterprise that is resident in an economy other than that of the investor. 1.1.2 The Government has put in place a policy framework on Foreign Direct Investment, which is transparent, predictable and easily comprehensible. This framework is embodied in the Circular on Consolidated FDI Policy, which may be updated every year, to capture and keep pace with the regulatory changes, effected in the interregnum. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through Press Notes/Press Releases which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 (notification No. FEMA 20/2000-RB dated May 3, 2000). These notifications take effect from the date of issue of Press Notes/ Press Releases, unless specified otherwise therein. In case of any conflict, the relevant FEMA Notification will prevail. The procedural instructions are issued....
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....id. Preference shares and convertible debentures shall be required to be fully paid, and should be mandatorily and fully convertible. Further, 'warrant' includes Share Warrant issued by an Indian Company in accordance to provisions of the Companies Act, as applicable. 2.1.6 'Capital account transaction' means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and includes transactions referred to in sub-section (3) of section 6 of FEMA. 2.1.7 'Competent Authority' means the concerned Administrative Ministry/Department empowered to grant government approval for foreign investment under the extant FDI Policy and FEMA Regulations. 2.1.8 'Control' shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. For the purposes of Limited Liability Partnership, 'control' will mean right to appoint majority of the designated partners, where such designated partners, with spec....
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.... is payable in foreign currency. 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. 2.1.14 'FDI' means investment by non-resident entity/person resident outside India in the capital of an Indian company under Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations,2000 (Original notification is available at https://rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=174. Subsequent amendment notifications are available at https://rbi.org.in/Scripts/BS_FemaNotifications.aspx). 2.1.15 'FDI linked performance conditions' means the sector specific conditions for companies receiving foreign investment. 2.1.16 'FEMA' means the Foreign Exchange Management Act, 1999 (42 of 1999). 2.1.17 '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 acco....
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....only investments in other Indian company/(ies), directly or indirectly, other than for trading of such holdings/securities. 2.1.27 'Investment on repatriable basis' means investment, the sale proceeds of which, net of taxes, are eligible to be repatriated out of India and the expression 'investment on non-repatriable basis' shall be construed accordingly. 2.1.28 'Joint Venture'(JV) means an Indian entity incorporated in accordance with the laws and regulations in India in whose capital a non-resident entity makes an investment. 2.1.29 'Limited Liability Partnership' means a Limited Liability Partnership firm, formed and registered under the Limited Liability Partnership Act, 2008. 2.1.30 'Manufacture', with its grammatical variations, means a change in a non-living physical object or article or thing- (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. 2.1.31 'Non-resident entity' means a 'person resident outside India' a....
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....ther purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) A person who has come to or stays in India, in either case, otherwise than- (a) for or on taking up employment in India; or (b) for carrying on in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an office, branch or agency in India owned or controlled by a person resident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India. 2.1.37 'Person resident outside India' means a person who is not a Person resident in India. 2.1.38 'Portfolio Investment Scheme' means the Portfolio Investment Scheme referred to in Schedules 2, 2A& 3 of FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. 2.1.39 'RBI' means the Reserve Bank of India established under the Reserve Bank of India Act, 1934. 2.1.40 'Resident Entity' means....
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....such subsequent change in beneficial ownership will also require Government approval.] 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 A company, trust and partnership firm incorporated outside India and owned and controlled by NRIs can invest in India with the special dispensation as available to NRIs under the FDI Policy. 3.1.5 (i) Foreign Institutional Investor (FII) and Foreign Portfolio Investors (FPI) may in terms of ....
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....linked instruments or debt instruments issued by the company (including start-ups and if a startup is organised as a partnership firm or an LLP, the investment can be made in the capital or through any profit-sharing arrangement) or units issued by a VCF or by a Category-I AIF either through purchase by private arrangement either from the issuer of the security or from any other person holding the security or on a recognised stock exchange.It may also set up a domestic asset management company to manage its investments. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident entities, in other companies, subject to FDI Policy and FEMA regulations. 3.1.8 A Non- Resident Indian may subscribe to National Pension System governed and administered by Pension Fund Regulatory and Development Authority (PFRDA), provided such subscriptions are made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act. The annuity/ accumulated saving will be repatriable. 3.2 Eligible investee entities 3.2.1 Indian Company Indian companies can issue capital against FDI. 3.2.2 Partnership Firm/Proprietary Concer....
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....version of a company having foreign investment and operating in sectors/activities where 100% FDI is allowed through the automatic route and there are no FDI-linked performance conditions, into an LLP is permitted under automatic route. (iv) FDI in LLP is subject to the compliance of the conditions of LLP Act, 2008. 3.2.5 Investment Vehicle An entity being 'investment vehicle' registered and regulated under relevant regulations framed by SEBI or any other authority designated for the purpose including Real Estate Investment Trusts (REITs) governed by the SEBI (REITs) Regulations, 2014, Infrastructure Investment Trusts (InvIts) governed by the SEBI (InvIts) Regulations, 2014, Alternative Investment Funds (AIFs) governed by the SEBI (AIFs) Regulations, 2012 and notified under Schedule 11 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 is permitted to receive foreign investment from a person resident outside India (other than an individual who is citizen of or any other entity which is registered / incorporated in Pakistan or Bangladesh), including an Registered Foreign Portfolio Investor (RFPI) or a no....
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....or to, a person resident in or outside India, provided the transfer takes place in accordance with the pricing guidelines as prescribed by RBI. Prior approval from the Government shall be obtained for such transfers in case the startup company is engaged in a sector which requires Government approval. (vi) The startup company issuing convertible notes shall be required to furnish reports as prescribed by Reserve Bank of India. 3.2.7 Other Entities FDI in resident entities other than those mentioned above is not permitted. 3.3 Instruments of investments, issue/transfer of shares etc. Types of instruments for investment and provisions relating to issue/ transfer of shares are given at Annexure 2 & Annexure 3 respectively. Further, specific conditions of compliance for certain cases are given in Annexure-4. 3.4 Entry Routes for Investment 3.4.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route. Under the Automatic Route, the non-resident investor or t....
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....nt made by residents. (vii) A company, trust and partnership firm incorporated outside India and owned and controlled by non-resident Indians will be eligible for investments under Schedule 4 of FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations and such investment will also be deemed domestic investment at par with the investment made by residents. 3.5 Caps on Investments 3.5.1 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 specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of this Circular. 3.6 Entry Conditions on Investment 3.6.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. 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. 3.7 Other Conditions on Investment besides Entry Conditions 3.7.1 Besides the entry conditions on foreign investment, the investment/investors are required to comply ....
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....es downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps. Note: Foreign investment into other Indian companies/LLPs would be in accordance/ compliance with the relevant sectoral conditions on entry route, conditionalities and caps. 3.8.4 Downstream investment by an eligible Indian entity which is not owned and/or controlled by resident entity/ies 3.8.4.1 Downstream investment by an eligible Indian entity, which is not owned and/or controlled by resident entity/ies, into another Indian company, would be in accordance/compliance with the relevant sectoral conditions on entry route, conditionalities and caps, with regard to the sectors in which the latter Indian company is operating. Note: Downstream investment/s made by a banking company, as defined in clause(c) of Section 5 of the Banking Regulation Act, 1949, incorporated in India, which is owned and/or controlled by non-residents/a non-resident entity/non-resident entities, under Corporate Debt Restructuring (CDR), or other loan restructuring mechanism, or in trading books, or for acquisition of shares due to defaults in loans, shall not count towa....
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....s have been delegated by Ministry of Home Affairs to DIPP Department of Defence Production, Ministry of Defence b) Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959 Ministry of Home Affairs (iii) Broadcasting Ministry of Information & Broadcasting (iv) Print Media (v) Civil Aviation Ministry of Civil Aviation (vi) Satellites Department of Space (vii) Telecommunication Department of Telecommunications (viii) Private Security Agencies Ministry of Home Affairs (ix) Applications involving investments from Countries of Concern which presently include Pakistan and Bangladesh, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines, amended from time to time (x) Trading (Single brand, Multi brand and Food Product retail trading) Department of Industrial Policy & Promotion (xi) FDI proposals by Non-Resident Indians (NRIs)/ Export Oriented Units requiring approval of the Government (xii) Applications relating to issue of equity shares under the FDI policy under the Government route for import of capital goods/machinery/equipment (exclud....
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....do not require Fresh Approval 4.2.1 Companies may not require fresh prior approval of the Government for bringing in additional foreign investment into the same entity, in the following cases: (i) Entities the activities of which had earlier required prior approval of Government and which had, accordingly, earlier obtained prior approval of Government for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route; (ii) Entities, the activities of which had sectoral caps earlier and which had, accordingly, earlier obtained prior approval of Government for their initial foreign investment but subsequently such caps were removed/increased and the activities placed under the automatic route; provided that such additional investment along with the initial/original investment does not exceed the sectoral caps; (iii) Additional foreign investment into the same entity where prior approval of Government had been obtained earlier for the initial/original foreign investment due to requirements of Press Note 18/1998 or Press Note 1 of 2005 and prior approval of the Government under the FDI policy is not require....
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....o account while calculating minimum capitalization requirement. b) Sectoral cap i.e. the maximum amount which can be invested by foreign investors in an entity, unless provided otherwise, is composite and includes all types of foreign investments, direct and indirect, regardless of whether the said investments have been made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI), 6 (FVCI), 9 (LLPs), 10 (DRs) and 11(Investment Vehicle) of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. FCCBs and DRs having underlying of instruments which can be issued under Schedule 5, being in the nature of debt, shall not be treated as foreign investment. However, any equity holding by a person resident outside India resulting from conversion of any debt instrument under any arrangement shall be reckoned as foreign investment under the composite cap. c) Foreign investment in sectors under Government approval route resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities will be subject to Government approval. Foreign investment in sectors under automatic route but with conditionalit....
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....ities where micro-climatic conditions are regulated anthropogenically. 5.2.2 Plantation Sector Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.2.1 (i) Tea sector including tea plantations (ii) Coffee plantations (iii) Rubber plantations (iv) Cardamom plantations (v) Palm oil tree plantations (vi) Olive oil tree plantations Note: Besides the above, FDI is not allowed in any other plantation sector/activity. 100% Automatic 5.2.2.2 Other Condition Prior approval of the State Government concerned is required in case of any future land use change. Mining and Petroleum & Natural Gas 5.2.3 Mining Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.3.1 Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores; subject to the Mines and Minerals (Development & Regulation) Act, 1957. 100% Automatic ^1[5.2.3.2 Coal & Lignite (1) Coal & Lignite mining for captive consumption by power projects, iron & steel and cement units and other eligible activities permitted under an....
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....e objective is to ensure that the raw material available in the country is utilized for setting up downstream industries and the technology available internationally is also made 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 prescribed at (i) (A) above shall be deemed to be fulfilled. 5.2.4 Petroleum & Natural Gas Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.4.1 Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies. 100% Automatic 5.2.4.2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment o....
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.... (1)Teleports(setting up of up-linking HUBs/Teleports); (2)Direct to Home (DTH); (3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability); (4)Mobile TV; (5)Headend-in-the Sky Broadcasting Service(HITS) 100% Automatic 5.2.7.1.2 Cable Networks(Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs)) 100% Automatic Note: Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require Government approval. 5.2.7.2 Broadcasting Content Services Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.7.2.1 Terrestrial Broadcasting FM(FM Radio), subject to such terms and conditions, as specified from time to time, by Ministry of Information & Broadcasting, for grant of permission for setting up of FM Radio stations 49% Government 5.2.7.2.2 Up-linking of 'News & Cu....
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....Activity % of Equity/ FDI Cap Entry Route (a) Greenfield projects 100% Automatic (b) Existing projects 100% Automatic 5.2.9.2 Air Transport Services Sector/Activity % of Equity/ FDI Cap Entry Route (1) (a) Scheduled Air Transport Service/Domestic Scheduled Passenger Airline (b) Regional Air Transport Service 100% Automatic up to 49% (Automatic up to 100% for NRIs) Government route beyond 49% (2) Non-Scheduled Air Transport Services 100% Automatic (3) Helicopter services/seaplane services requiring DGCA approval 100% Automatic 5.2.9.3 Other services under Civil Aviation sector Sector/Activity % of Equity/ FDI Cap Entry Route (1) Ground Handling Services subject to sectoral regulations and security clearance 100% Automatic (2) Maintenance and Repair organizations; flying training institutes; and technical training institutions. 100% Automatic Definitions: The Civil Aviation sector includes Airports, Scheduled and Non-Scheduled domestic passenger airlines, Helicopter services/Seaplane services, Ground Handling Services....
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....a part of either ramp handling or traffic handling. Other Conditions (a) Air Transport Services would include Domestic Scheduled Passenger Airlines; NonScheduled Air Transport Services, helicopter and seaplane services. (b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above. (c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions: (i) It would be made under the Government approval route. (ii) The 49% limit will subsume FDI and FII/FPI investment. (iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations. (iv) A Scheduled Op....
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....her non-resident, without repatriation of investment will neither be subject to any lock-in period nor to any government approval. (B) The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned. (C) The Indian investee company will be permitted to sell only developed plots. For the purposes of this policy "developed plots" will mean plots where trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage, have been made available. (D) The Indian investee company shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/Municipal/Local Body concerned. (E) The State Government/Municipa....
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.... has the effect of transferring, or enabling the enjoyment of, any immovable property. 5.2.11 Industrial Parks Sector/Activity % of Equity/ FDI Cap Entry Route Industrial Parks -new and existing 100% Automatic 5.2.11.1 Other conditions for investment in Industrial Parks are at Annexure-8. 5.2.12 Satellites- establishment and operation Sector/Activity % of Equity/ FDI Cap Entry Route Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO 100% Government 5.2.13 Private Security Agencies Sector/Activity % of Equity/ FDI Cap Entry Route Private Security Agencies 74% Automatic up to 49% Government route beyond 49% and up to 74% 5.2.13.1 Other Conditions • FDI in Private Security Agencies is subject to compliance with Private Security Agencies (Regulation) (PSAR) Act, 2005, as amended from time to time. • For the purposes of FDI policy on the sector, terms "Private Security Agencies", "Private Security" and "Armoured Car Service" will have the same meaning as provided under PSAR Act, 2005, which is reproduced as under: ....
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....ce providers. Wholesale trading would, accordingly, imply 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. 5.2.15.1.2 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 obtained. (b) 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 hol....
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....2B) e-commerce and not in Business to Consumer (B2C) e-commerce. 5.2.15.2.2 Definitions: i) E-commerce- E-commerce means buying and selling of goods and services including digital products over digital & electronic network. ii) E-commerce entity- E-commerce entity means a company incorporated under the Companies Act 1956 or the Companies Act 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in section 2 (v) (iii) of FEMA 1999, owned or controlled by a person resident outside India and conducting the e-commerce business. iii) Inventory based model of e-commerce- Inventory based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly. iv) Marketplace based model of e-commerce- Marketplace based model of e-commerce means providing of an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller. 5.2.15.2.3 Guidelines for Foreign Direct Investment on e-commerce s....
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....f Equity/ FDI Cap Entry Route Single Brand Product retail trading 100% Automatic (1) Foreign Investment in Single Brand Product retail 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 Product retail trading 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-retail trading would cover only products which are branded during manufacturing. (d) A non-resident entity or entities, whether owner of the brand or otherwise, shall be permitted to undertake 'single brand' product retail trading in the country for the specific brand, either directly by the brand owner or through a legally tenable agreeme....
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....(2) (b) & 5.2.15.3 (2) (d) will not be applicable for undertaking SBRT of Indian brands. (ii) Indian brands should be owned and controlled by resident Indian citizens and/or companies which are owned and controlled by resident Indian citizens. (iii) Sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of first store or start of online retail, whichever is earlier for entities undertaking single brand retail trading of products having `state-of-art' and 'cutting-edge' technology and where local sourcing is not possible. Thereafter, provisions of Para 5.2.15.3 (2) (e) will be applicable. A Committee under the Chairmanship of Secretary, DPIIT, with representatives from NITI Aayog, concerned Administrative Ministry and independent technical expert(s) on the subject will examine the claim of applicants on the issue of the products being in the nature of 'state-of-art' and 'cutting-edge' technology where local sourcing is not possible and give recommendations for such relaxation.] 5.2.15.4 Multi Brand Retail Trading Sector/Activity % of Equity/ FDI Cap Entry Route Multi Brand Retail Trading....
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....rial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shall maintain accounts, duly certified by statutory auditors. (vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census or any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking. (vii) Government will have the first right to procurement of agricultural products. (viii) The above policy is an enabling policy only and the State Governments/Union Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy. The list of States/Union Territories which have conveyed their agre....
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....utomatic Note: (i) Foreign Direct Investment in the abovementioned activities open to private sector participation including FDI is subject to sectoral guidelines of Ministry of Railways. (ii)Proposals involving FDI beyond 49% in sensitive areas from security point of view, will be brought by the Ministry of Railways before the Cabinet Committee on Security (CCS) for consideration on a case to case basis. Financial Services Foreign investment in other financial services, other than those indicated below, would require prior approval of the Government. 5.2.17 Asset Reconstruction Companies Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.17.1'Asset Reconstruction Company' (ARC) means a company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). 100% Automatic 5.2.17.2 Other Conditions (i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank of India, up to 100% on the automatic route. (ii) Investment limit o....
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....ertakings) Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks. 20% Government 5.2.20 Credit Information Companies (CIC) Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.20.1 Credit Information Companies 100% Automatic 5.2.20.2 Other Conditions (1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005. (2) Foreign investment is permitted subject to regulatory clearance from RBI. (3) Such FII/FPI investment would be permitted subject to the conditions that: (a) A single entity should directly or indirectly hold below 10% equity. (b) Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement; and (c) FIIs/FPIs investing in CICs shall not seek a representation on the Board of Directors based upon their shareholding. 5.2.21 Infrastructure Company in the Securities Market Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.21.1Infrastructure companies in Securities Markets, namel....
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.... goods, which is not a ready delivery contract; or • a contract for differences which derives its value from prices or indices of prices of such underlying goods or activities, services, rights, interests and events, as may be notified in consultation with SEBI by the Central Government, but does not include securities. ^7[5.2.22 Insurance Sector/ Activity % of Equity/FDI cap Entry Route 5.2.22.1 Insurance Company 49% Automatic 5.2.22.2 Intermediaries or Insurance Intermediaries including insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors and such other entities, as may be notified by the Insurance Regulatory and Development Authority of India from time to time. 100% Automatic] ^8[5.2.22.3] ^9[Other Conditions (a) No Indian Insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed forty-nine percent of the paid up equity capital of such Indian Insurance company. (b) The fore....
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....nies (Foreign Investment) Rules, 2015, as amended from time to time: Provided that where an entity like a Bank, whose primary business is outside the insurance area, is allowed by the Authority to function as an insurance intermediary, the foreign equity investment caps applicable in that sector shall continue to apply, subject to the condition that the revenues of such entities from the primary (non-insurance related) business must remain above 50 per cent of their total revenues in any financial year. (i) The insurance intermediary that has majority shareholding of foreign investors shall undertake the following: i. be incorporated as a limited company under the provisions of the Companies Act, 2013; ii. at least one from among the Chairman of the Board of Directors or the Chief Executive Officer or Principal Officer or Managing Director of the insurance intermediary shall be a resident Indian citizen; iii. shall take prior permission of the Authority for repatriating dividend; iv. shall bring in the latest technological, managerial and other skills; v. shall not make payments to the fore....
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....ivity % of Equity/ FDI Cap Entry Route 5.2.24.1 Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. 49% Automatic 5.2.24.2 Other Conditions (i) FII/FPI purchases shall be restricted to secondary market only; (ii) No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in these companies; and (iii) The foreign investment would be in compliance with SEBI Regulations; other applicable laws/regulations; security and other conditionalities. 5.2.25 White Label ATM Operations Sector/Activity % of Equity/ FDI Cap Entry Route White Label ATM Operations 100% Automatic Other Conditions (i) Any non-bank entity intending to set up WLAs should have a minimum net worth of Rs. 100 crore as per the latest financial year's audited balance sheet, which is to be maintained at all times. (ii) In case the entity is also engaged in any 'Other Financial Services' as laid down at Para 5.2.26 below, then the foreign investment in the company setting up WLA, shall also have to comply w....
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....equired to provide a certificate along with the application for foreign investment as per Annexure-10. (iii) Government may incorporate appropriate conditions for FDI in brownfield cases, at the time of granting approval. (iv) FDI in brownfield pharmaceuticals, under both automatic and government approval routes, is further subject to compliance of following conditions: (a) The production level of National List of Essential Medicines (NLEM) drugs and/or consumables and their supply to the domestic market at the time of induction of FDI, being maintained over the next five years at an absolute quantitative level. The benchmark for this level would be decided with reference to the level of production of NLEM drugs and/or consumables in the three financial years, immediately preceding the year of induction of FDI. Of these, the highest level of production in any of these three years would be taken as the level. (b) R&D expenses being maintained in value terms for 5 years at an absolute quantitative level at the time of induction of FDI. The benchmark for this level would be decided with reference to the highest level of R&D expenses which has been incurred in any of the th....
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....its Authorised Dealer Category - I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company making the declaration is situated as and when shares/convertible debentures / others are issued to the foreign investor, along with the documents mentioned in item No. 5 of the undertaking enclosed to this form. All fields are mandatory) . Permanent Account Number (PAN) of the investee company given by the Income Tax Department Date of issue of shares / convertible debentures/others No. Particulars (In Block Letters) 1. Name of the Investee Company Address of the Registered Office of the Investee Company with City, District and State clearly mentioned Telephone Fax ....
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....sue Date of issue Number of shares/ convertible debentures/others 01 IPO / FPO 02 Preferential allotment / private placement 03 Rights 04 Bonus 05 Conversion of ECB 06 Conversion of royalty (including lump sum payments) 07 Conversion against import of capital goods by units in SEZ 08 ESOPs 09 Share Swap 10 Others (please specify) Total (b) Type of security issued No. Nature of security Number Maturity Face value Premium Issue Price per security Amount of inflow* 01 Equity 02 Compulsorily Convertible Debentures 03 Compulsorily Convertible Preference shares ....
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.... 07 Pension/ Provident Funds 08 Sovereign Wealth Funds 09 Partnership/ Proprietorship Firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Sub Total b) Resident Total DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIAN COMPANY:(Delete whichever is not applicable and authenticate) We hereby declare that: 1. We comply with the procedure for issue of shares / convertible debentures as laid down under the FDI scheme as indicated in Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time. 2. The investment is....
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.... R (Signature of the Applicant)* :_______________________________________ (Name in Block Letters) :___________________________________________ (Designation of the signatory) :______________________________________ Place: Date: (* To be signed by Managing Director/Director/Secretary of the Company) CERTIFICATE TO BE FILED BY THE COMPANY SECRETARY 4 OF THE INDIAN COMPANY ACCEPTING THE INVESTMENT: (As per Para 9 (1) (B) (i) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000) In respect of the abovementioned details, we certify the following : 1. All the requirements of the Companies Act, 1956 have been complied with. 2. Terms and conditions of the Government approval, if any, have been complied with. 3. The company is eligible to issue shares / convertible debentures/others under these Regulations. 4. The company has all origina....
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....n or after May 1, 2007 are considered as debt. Accordingly all norms applicable for ECBs relating to eligible borrowers, recognized lenders, amount and maturity, end-use stipulations, etc. shall apply. Since these instruments would be denominated in rupees, the rupee interest rate will be based on the swap equivalent of London Interbank Offered Rate (LIBOR) plus the spread as permissible for ECBs of corresponding maturity. 3. The inward remittance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. 4. Acquisition of Warrants and Partly Paid Shares - An Indian company may issue warrants and partly paid shares to a person resident outside India subject to terms and conditions as stipulated by the Reserve Bank of India in this behalf, from time to time. 5. Issue of Foreign Currency Convertible Bonds (FCCBs) and Depository Receipts (DRs) a) FCCBs/DRs may be issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and DR Scheme 2014 respectively, as per the guidelines issued by the Government of India there under from....
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....reholders a choice to submit their shares back to the company so that on the basis of such shares, ADRs/GDRs can be issued abroad. The proceeds of the ADR/GDR issue are remitted back to India and distributed among the resident investors who had offered their Rupee denominated shares for conversion. These proceeds can be kept in Resident Foreign Currency (Domestic) accounts in India by the resident shareholders who have tendered such shares for conversion into ADRs/GDRs. Annexure-3 Provisions Relating to Issue/ Transfer of Shares 1. The capital instruments should be issued within 180 days from the date of receipt of the inward remittance received through normal banking channels including escrow account opened and maintained for the purpose 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 investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may ....
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....t outside India (including NRIs) . Government approval is not required for transfer of shares in the investee company from one non-resident to another non-resident in sectors which are under automatic route. In addition, approval of Government will be required for transfer of stake from one non-resident to another non-resident in sectors which are under Government approval route. (b) NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI. (c) A person resident outside India can transfer any security to a person resident in India by way of gift. (d) A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI. (e) A person resident in India can transfer by way of sale, shares/ convertible debentures (including transfer of subscriber's shares) , of an Indian company under private arrangement to a person resident outside India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure. (f) General perm....
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....row account and Special account of non-resident corporate for open offers/exit offers and delisting of shares. The relevant SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST) Regulations or any other applicable SEBI Regulations/provisions of the Companies Act, as applicable will be applicable. AD Category-I banks have also been permitted to open and maintain, without prior approval of RBI, non-interest bearing Escrow accounts in Indian Rupees in India on behalf of residents and/or non-residents, towards payment of share purchase consideration and/or provide Escrow facilities for keeping securities to facilitate FDI transactions subject to the65terms and conditions specified by RBI. SEBI authorised Depository Participants have also been permitted to open and maintain, without prior approval of RBI, Escrow accounts for securities subject to the terms and conditions as specified by RBI. In both cases, the Escrow agent shall 65necessarily be an AD Category-I bank or SEBI authorised Depository Participant (in case of securities' accounts) . These facilities will be applicable for both issue of fresh shares to the non- residents as well as transfer of shares ....
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....nd 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. (b) The gift does not exceed 5 per cent of the paid-up capital of the Indian company/each series of debentures/each mutual fund scheme. (c) The applicable sectoral cap limit in the Indian company is not breached. (d) The transferor (donor) and the proposed transferee (donee) are close relatives as defined in Section 2 (77) of Companies Act, 2013, as amended from time to time. The current list is reproduced in Section 3 of this Annexure. (e) The value of capital instruments to be transferred together with any capital instruments already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 50,000 during the financial year. (f) Such other conditions as stipulated by Reserve Bank in public interest from time to time. (iii) Transfer of shares from NRI to non-resident. 5.2 In the following cases, approval of RBI is not required: A. Transfer of shares from a Non-Resident to Resident under the FDI scheme where the pricing guidelines under FEMA, 1999 are not met provided....
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....e been complied with; and b) The FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalization, pricing, etc.) , reporting requirements, documentation etc., are complied with. 6. Conversion of ECB/Lump sum Fee/Royalty etc. into Equity (i) Indian companies have been granted general permission for conversion of External Commercial Borrowings (ECB) (excluding those deemed as ECB) in convertible foreign currency into equity shares/fully compulsorily and mandatorily convertible preference shares, subject to the following conditions and reporting requirements: (a) The activity of the company is covered under the Automatic Route for FDI or the company has obtained Government approval for foreign equity in the company; (b) The foreign equity after conversion of ECB into equity is within the sectoral cap, if any; (c) Pricing of shares is as per the provision of para 2 above; (d) Compliance with the requirements prescribed under any other statute and regulation in force; and (e) The conversion facility is available for ECBs availed under the Automatic or Government Route and is applicabl....
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....serve Bank. b. The valuation of the equity shares or preference shares or convertible debentures or warrants shall be subject to the provisions of Paragraph 5 of Schedule 1 of these Regulations. c. A certificate issued by the statutory auditor of the Indian company that the amount of pre-incorporation/pre-operative expenses against which equity shares or preference shares or convertible debentures or warrants have been issued has been utilized for the purpose for which it was received should be submitted with the FC-GPR form. Explanation: Pre-incorporation/pre-operative expenses shall include amounts remitted to Investee Company's account, to the investor's account in India if it exists, to any consultant, attorney or to any other material/service provider for expenditure relating to incorporation or necessary for commencement of operations. (iv) Issue of equity shares under the FDI policy is allowed under the Government route for the following: (I) import of capital goods/ machinery/ equipment (excluding second-hand machinery) , subject to compliance with the following conditions: (a) Any import of capital goods/machinery etc.,....
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....nsactions: i. Transfer of shares by way of sale under private arrangement by a person resident in India to a person resident outside India. ii. Transfer of shares by way of sale under private arrangement by a person resident outside India to a person resident in India. iii. Exit by non-resident investor on exercising option/right in shares or compulsorily & mandatorily convertible preference shares or fully, compulsorily & mandatorily convertible debentures. 2.2 Transfer by Resident to Non-resident (i.e. to foreign national, NRI, FII, FPI and incorporated non-resident entity other than erstwhile OCB) Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: (a) listed on a recognized stock exchange in India ,shall not be less than the price at which the preferential allotment of shares can be made 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 fai....
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....held on repatriation basis, the sale proceeds (net of taxes) may be credited to his NRE /FCNR (B) accounts and if the shares sold were held on non repatriation basis, the sale proceeds may be credited to his NRO account subject to payment of taxes. 4.3 The sale proceeds of shares (net of taxes) sold by an OCB may be remitted outside India directly if the shares were held on repatriation basis and if the shares sold were held on non-repatriation basis, the sale proceeds may be credited to its NRO (Current) Account subject to payment of taxes, except in the case of OCBs whose accounts have been blocked by Reserve Bank. 5. Documentation Besides obtaining a declaration in the enclosed Form FC-TRS (in quadruplicate) , the AD branch should arrange to obtain and keep on record the following documents: 5.1 For sale of shares by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent indicating the details of transfer i.e. number of shares to be transferred, the name of the investee company whose shares are being transferred and the price at which shares are being transferred. In case there is no formal Sale Agreeme....
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....rting requirements 6.1 Reporting of transfer of shares between residents and non-residents and vice versa is to be done in Form FC-TRS. The Form FC-TRS should be submitted to the AD Category-I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor / transferee, resident in India. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Forms and submit a monthly report to the Reserve Bank5. For the purpose the Authorized Dealers may designate branches to specifically handle such transactions. These branches could be staffed with adequately trained staff for this purpose to ensure that the transactions are put through smoothly. The ADs may also designate a nodal office to coordinate the work at these branches and also ensure the reporting of these transactions to the Reserve Bank. 6.2 When the transfer is on private arrangement basis, on settlement of the transactions, the transferee/his duly appointed agent should approach the investee company to record the transfer in their books along with the certificate i....
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.... a certificate from the issuer on the Net Asset Value of such security. vi. In case of shares and convertible debentures, a certificate from a Chartered Accountant on the value of such securities according to the guidelines issued by Securities & Exchange Board of India or as per any internationally accepted pricing methodology on arm's length basis for listed companies and unlisted companies, respectively. vii. Certificate from the concerned Indian company certifying that the proposed transfer of shares/convertible debentures by way of gift from resident to the non-resident shall not breach the applicable sectoral cap/ FDI limit in the company and that the proposed number of shares/convertible debentures to be held by the non-resident transferee shall not exceed 5 per cent of the paid up capital of the company. viii. An undertaking from the resident transferor that the value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 50,000during a financial year*. *RBI's A.P. (DIR Series) Circular No. 14 Dated 15.09.2011 ....
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....total paid-up capital of the company does not exceed the sectoral cap. 4. Acquisition of shares under Scheme of Merger/Demerger/Amalgamation Mergers/demergers/ amalgamations of companies in India are usually governed by an order issued by a competent Court on the basis of the Scheme submitted by the companies undergoing merger/demerger/amalgamation. Once the scheme of merger or demerger or amalgamation of two or more Indian companies has been approved by a Court in India, the transferee company or new company is allowed to issue shares to the shareholders of the transferor company resident outside India, subject to the conditions that: (i) the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the sectoral cap, and (ii) the transferor company or the transferee or the new company is not engaged in activities which are prohibited under the FDI policy. Note: Government approval would not be required in case of mergers and acquisitions taking place in sectors under automatic route. 4.1 Issue of Non convertible/redeemable bonus preference shares or debentures Indian companies are allowed to issue....
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....ernment is required for investment in automatic route sectors by way of swap of shares. 7. Pledge of Shares (A) A person being a promoter of a company registered in India (borrowing company) , which has raised external commercial borrowings, may pledge the shares of the borrowing company or that of its associate resident companies for the purpose of securing the ECB raised by the borrowing company, provided that a no objection for the same is obtained from a bank which is an authorised dealer. The authorized dealer, shall issue the no objection for such a pledge after having satisfied itself that the external commercial borrowing is in line with the extant FEMA regulations for ECBs and that: i) the loan agreement has been signed by both the lender and the borrower, ii) there exists a security clause in the Loan Agreement requiring the borrower to create charge on financial securities, and iii) the borrower has obtained Loan Registration Number (LRN) from the Reserve Bank: and the said pledge would be subject to the following conditions: a) the period of such pledge shall be co-terminus with the maturity of the underlying ECB;....
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....t by resident Indian entities could again comprise of both resident and non-resident investment. Thus, such an Indian company would have indirect foreign investment if the Indian investing company has foreign investment in it. The indirect investment can also be a cascading investment i.e. through multi-layered structure. 1.1 For the purpose of computation of indirect foreign investment in an Indian company, foreign investment in an Indian company shall include all types of foreign investments i.e. FDI; investment by FIIs (holding as on March 31) , FPIs (holding as on March 31) ; NRIs; ADRs; GDRs; Foreign Currency Convertible Debentures (FCCBs) ; Investment Vehicles fully, compulsorily and mandatorily convertible preference shares and fully, compulsorily and mandatorily convertible Debentures or units of an Investment Vehicle, regardless of whether the said investments have been made under Schedule 1, 2, 2A, 3, 6, 9, 10 and 11 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000. 1.2 Guidelines for calculation of total foreign investment i.e. direct and indirect foreign investment (i) Counting of direct foreign investment All inves....
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....nvests 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 sum total of direct and indirect foreign investment. (iv) The above methodology of calculation would apply at every stage of investment in Indian companies and thus to each and every Indian company. (v) Additional conditions (a) The full details about the foreign investment including ownership details etc. in Indian company (s) and information about the control of the company (s) would be furnished by the Company (s) to the Government of India at the time of seeking approval. (b) In any sector/....
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....in Sub-Clauses (I) and (II) of clause 1.2 (v) (d) (A) 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 Companies Act,1956 or section 89 of the Companies Act, 2013, as the case may be 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. 1.3 The above mentioned policy and methodology would be applicable for determining the total foreign investment in all sectors, except in sectors where it is specified in a statute or rule there under. The above methodology of determining direct and indirect foreign investment therefore does not apply to the Insurance Sector which will continue to be governed by the relevant Regulation. Similarly, above methodology will also not apply to downstream investments by an Investment Vehicle. Relevant conditions of downstream investment by Investment Vehicles are as under: (i) Downstream investment by an Investment Vehicle shall be regarded a....
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.... to conform to these guidelines. All other investments, past and future, would come under the ambit of these new guidelines. Annexure-6 Remittance, Reporting and Violation 1. Remittance and Repatriation 1.1 Remittance of sale proceeds/Remittance on winding up/Liquidation of Companies: (i) Sale proceeds of shares and securities and their remittance is 'remittance of asset' governed by The Foreign Exchange Management (Remittance of Assets) Regulations, 2000 under FEMA. (ii) AD Category-I bank can allow the remittance of sale proceeds of a security (net of applicable taxes) to the seller of shares resident outside India, provided the security has been held on repatriation basis, the sale of security has been made in accordance with the prescribed guidelines and NOC/tax clearance certificate from the Income Tax Department has been produced. (iii) Remittance on winding up/liquidation of Companies AD Category-I banks have been allowed to remit winding up proceeds of companies in India, which are under liquidation, subject to payment of applicable taxes. Liquidation may be subject to any order issued by the court winding up the company or th....
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....ned, which will allot a Unique Identification Number (UIN) for the amount reported. Explanation: An Indian company issuing partly paid equity shares, shall furnish a report not later than 30 days from the date of receipt of each call payment. 2.2 Reporting of issue of shares (i) After issue of shares (including bonus and shares issued on rights basis and shares issued under ESOP and against Convertible Notes) /fully, mandatorily & compulsorily convertible debentures/fully, mandatorily & compulsorily convertible preference shares, the Indian company has to file Form FC-GPR, not later than 30 days from the date of issue of shares. (ii) Form FC-GPR has to be duly filled up and signed by Managing Director/Director/Secretary of the Company and submitted to the Authorized Dealer of the company, who will forward it to the Reserve Bank. The following documents have to be submitted along with the form: (a) A certificate from the Company Secretary of the company certifying that: (A) all the requirements of the Companies Act, as applicable, have been complied with; (B) terms and conditions of the Government of India approval, if any, have been complied w....
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.... onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. However, in cases where the NR investor, including an NRI, acquires shares on the stock exchanges under the FDI scheme, the investee company would have to file form FC-TRS with the AD Category-I bank. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Form FC-TRS and submit a monthly report to the Reserve Bank. 2.4 Reporting of Non-Cash Details of issue of shares against conversion of ECB have to be reported to the Regional Office concerned of the RBI, as indicated below: (i) In case of full conversion of ECB into equity, the company shall report the conversion in Form FC-GPR to the Regional Office concerned of the Reserve Bank as well as in Form ECB-2 to the Department of Statistics and Information Management (DSIM) , Reserve Bank of India, Bandra-Kurla Complex, Mumbai- 400 051, within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" shall be clearly indicated on top of the Form ECB-2. Once reported, filing of Form ECB-2 in the subseq....
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....emed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. (iii) Any Adjudicating Authority adjudging any contraventions under 3.1 (i) above, may, if he thinks fit in addition to any penalty which he may impose for such contravention direct that any currency, security or any other money or property in respect of which the contravention has taken place shall be confiscated to the Central Government. 3.2 Adjudication and Appeals (i) For the purpose of adjudication of any contravention of FEMA, the Ministry of Finance as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 appoints officers of the Central Government as the Adjudicating Authorities for holding an enquiry in the manner prescribed. A reasonable opportunity has to be given to the person alleged to have committed contraventions against whom a complaint has been made for being heard before imposing any penalty. (ii) The Central Government may appoint as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, an Appellate Author....
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....bsp; Fax Telephone e-mail 2 Details of the foreign investor/ collaborator Name Address Country 3. Date of receipt of funds 4. Amount In foreign currency In Indian Rupees 5. Whether investment is under Automatic Route or Approval Route If Approval Route, give details (ref. no. of approval and date) Automatic Route / Approval Route 6. Name of the AD through whom the remittance is received 7. Address of the AD A Copy of the FIRC evidencing the receipt of consideration for issue of shares/ convertible debentures as above is enclosed. (Authorised signatory of the investee company) (Stamp) (Authorised signatory of the AD) (Stamp) FOR USE OF THE RESERVE BANK ONLY: Unique Identification Number for the remittance received: SECTION-2 Know Your Customer (KYC) Form in r....
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....any Name has changed during the last financial year (April-March)(Y/N)? If yes,please specify the Company's old Name ________ Company's old Name:____ Effective Date(DD/MM/YYYY) 8.WhethertheCompanyis listed(Y/N)? If yes, please furnish the share price on closing date of reference period Face Value (Per Share) Market Value (Per Share) Latest March Previous March Latest March Ordinary/Equity Share 9. Identification of the reporting Company(in terms of in ward FDI) (a) Subsidiary of Foreign entity (b)Associate of foreign entity (c) Public Private Partnership (d) Special Purpose Vehicle (e) Other 10.Whether the Company is Asset Management Company(Y/N)? 11.Whether the Company has Technical Foreign collaboration(Y/N)? 12.Whether the company has any business activity du....
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.... class Betc.),consolidated figure should be reported. #Non-participating Preference Share do not have following rights. (a) to receive dividend, out of surplus profit after paying the dividend to equity shareholders. (b) to have share in surplus assets remaining after the entire capital is paid incase of winding up of the company. Block 1B:Profit and Loss Account(from P/L Account) Item Amount in Rslakh Previous Year (April-March) Latest Year (April-March) 3.1 Profit(+)/Loss(-) before tax (During the Year) 3.2 Profit(+)/Loss(-) after tax (During the Year) 3.3 Dividend (Interim & Final Dividend) 3.4 Tax on Dividend (if any) 3.5 Retained Profit(=3.2-3.3-3.4) Block 1 C: Reserves & Surplus (from Balance Sheet) Note: To be filled in by company where single foreign direct investor holding is more than 50% in total equity (i.e. If reporting Indian company is subsidiary of Foreign company). Amount in Rs lakh (During the year) Item Previous Year (April-March) Latest Year (April-March) 5.....
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....de credit, loan, debentures, Non-participating share capital, other accounts receivable and payables etc.)of Indian reporting company with its director investor indicated inBlock-2A. Block 2B: Investment in India under Foreign Direct Investment(FDI)scheme(Less than 10% Equity Holding) [Please furnish here the outstanding investments made under the FDI Scheme in India by Non-resident Direct investors, who were individually holding less 10 than percent ordinary/equity and participating preference shares of your company on the reference date]. Country-wise consolidated information should be provided below: Type of Capital Country of non-resident investor Equity & Participating Preference share capital holding percent as at the end of latest year(%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Capital (= 1.1-1.2) 1.1 Liabilities to Direct Investor 1.2 Claims on Direct Investor (Reverse investment) 2.0 Other Capital (= 2.1-2.2)# ....
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....serves & Surplus of Direct Investment Enterprise(DIE) Abroad(10%or more equity holding by Indian Reporting company) [Please report here the total equity of DIE, equity held by your company, reserves (excluding P&L Account) and P&L Account of those DIE sin each of which your company hold 10% or more equity shares on the reference date.] Name of the DIE Item Currency Amount in Foreign Currency as at the end of (in actual) Previous March Latest March 3.1 Total Equity of DIE (Paid up capital of DIE) 3.2 Equity of DIE held by you (at face value) 3.3 Reserves (Excluding P&L Account) 3.4 Profit and Loss Account balance 3.5 Reserve and Surplus ( 3.5=3.3+3.4) 3.6 Net Worth of DIE (3.6 =3.1+3.5) 3.7 Exchange rate in Rs per unit foreign currency* *:Exchange rate of reporting foreign currency against Indian Rs should be given as on closing date of reference period. Block-4:Direct I....
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....bilities to Direct Investment Enterprise Note: (i) If the information is to be furnish form other than one country, then use the ADD Block 4B with the same format. (ii) #:Other capital, item2.1&2.2ofBlock-4B includes all other liabilities and claims at Nominal value, except equity, (i.e. trade credit, loan, debentures, Non-participating share capital, other accounts receivable and payables etc.) of Indian reporting company with non-resident companies where Indian company holds lessthan10percentequityandalso with related parties. Block-5:Portfolio Investment Abroad Please furnish here the market value of out standing investments in non-resident enterprises,other than those made under ODI scheme reported in Block-4. Portfolio Investment Country of non-resident enterprise Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Securities (at Market Value) 2.0 Debt Securities (=2.1+2.2) 2.1 Money Market Instruments (original maturity upto1year) 2.2 Bonds and....
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.... debentures /others by way of sale from resident to nonresident / non-resident to resident (to be submitted to the designated AD branch in quadruplicate within 60 days from the date of receipt of funds) The following documents are enclosed For sale of shares / compulsorily and mandatorily convertible preference shares / debentures / others by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document. ii. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India. iii. Certificate indicating fair value of shares from a Chartered Accountant. iv. Copy of Broker's note if sale is made on Stock Exchange. v. Declaration from the buyer to the effect that he is eligible to acquire shares / compulsorily and mandatorily convertible preference shares / debentures/others under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. vi. Declaration from....
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.... Date and Place of Incorporation Address of the seller (including e-mail, telephone Number Fax no) 6 Particulars of earlier Reserve Bank / Government approvals 7 Details regarding shares / compulsorily and mandatorily convertible preference shares (CMCPS) / debentures/ others (such as FDI compliant instruments like participating interest rights in oil fields, etc.) to be transferred Date of the transaction Number of shares CMCPS / debentures /others Face value in Rs. Negotiated Price for the transfer**in Rs. Amount of consideration in Rs. 8 Foreign Investments in the company No. of shares Percentage Before the transfer After the transfer 9 Where the shares / CMCPS / debentures / others are listed on Stock Exchange Name of the Stock Exchange Price Quoted on the Stock exchange Where....
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....ividual) Name of the Remitter's Bank Remitter's Bank Account No. Period of banking relationship with the Remitter *Passport No., Social Security No, or any Unique No. certifying the bonafides of the remitter as prevalent in the remitter's country. We confirm that all the information furnished above is true and accurate as provided by the overseas remitting bank of the non-resident investor. (Signature of the Authorised Official of the AD bank receiving the remittance) Date: Place: Stamp : Proforma Statement of inflows/outflows on account of remittance received/made in connection with transfer of shares / compulsorily and mandatorily convertible preference shares / debentures/others/other, by way of sale Category-wise Part A - NRI/erstwhile OCB Part B - Foreign National/non-resident incorporated entity Part C - Foreign Institutional Investors Inflow -Transfer from resident to non-resident [Amount in Rs.] Date of Trans action Name of the Comp any Activity NIC Code Name of the Buyer Consti tution/Nature of Business of the Buyer Name ....
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.... (i) Held by persons Resident in India (ii) Held by foreign investors other than FIIs/NRIs/PIOs/ OCBs (a list of foreign investors holding more than 10 percent of the paid-up capital and number of shares held by each of them should be furnished) (iii) Held by NRIs/PIOs (iv) Held by FIIs/QFIs/registered FPIs Total Equity held by non-residents c Percentage of equity held by non-residents to total paid-up capital d Details of repatriation/utilisation of the proceeds 13. Number of DRs issued 14. Ratio of DRs to underlying securities 15. Whether funds are kept abroad. If yes, name and address of the bank 16. Whether the DR is listed/traded on an International Exchange or trading platform. If so, details of the exchange/trading platform. Name of Stock Exchange Date of commencement of trading 17. The date on which DRs issue was launched Certified that all the conditions la....
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....ecified by the Ministry of Information and Broadcasting from time to time, prior permission of the Ministry of Information and Broadcasting shall have to be obtained. It shall be obligatory on the part of the company to also take prior permission from the Ministry of Information and Broadcasting before effecting any change in the Board of Directors. (iv) The Company shall be required to obtain security clearance of all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract, and consultancy or in any other capacity for installation, maintenance, operation or any other services prior to their deployment. The security clearance shall be required to be obtained every two years. Permission vis-à-vis Security Clearance (v) The permission shall be subject to permission holder/licensee remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn, the permission granted is liable to be terminated forthwith. (vi) In the event of security clearance of any of the persons associated with the permission holder/licensee or foreign personnel being denied or w....
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....xiv)The inspection will ordinarily be carried out by the Government of India, Ministry of Information & Broadcasting or its authorized representative after reasonable notice, except in circumstances where giving such a notice will defeat the very purpose of the inspection. (xv)The company shall submit such information with respect to its services as may be required by the Government or its authorized representative, in the format as may be required, from time to time. (xvi)The permission holder/licensee shall be liable to furnish the Government of India or its authorized representative or TRAI or its authorized representative, such reports, accounts, estimates, returns or such other relevant information and at such periodic intervals or such times as may be required. (xvii)The service providers should familiarize/train designated officials or the Government or officials of TRAI or its authorized representative(s) in respect of relevant operations/features of their systems. National Security Conditions (xviii)It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security a....
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....lities meant for common use of the units located in the Industrial Park. (iv) "Allocable area" in the Industrial Park means- (a) in the case of plots of developed land- the net site area available for allocation to the units, excluding the area for common facilities. (b) in the case of built up space- the floor area and built up space utilized for providing common facilities. (c) in the case of a combination of developed land and built-up space- the net site and floor area available for allocation to the units excluding the site area and built up space utilized for providing common facilities. (v)"Industrial Activity" means manufacturing; electricity; gas and water supply; post and telecommunications; software publishing, consultancy and supply; data processing, database activities and distribution of electronic content; other computer related activities; basic and applied R&D on bio-technology, pharmaceutical sciences/life sciences, natural sciences and engineering; business and management consultancy activities; and architectural, engineering and other technical activities. 1.2 FDI in Industrial Parks would not be subject to the conditionalitie....
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.... and IRDAI on these matters will continue to apply. (e) 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. (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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....h 13, 2014 and A.P. (DIR Series) Circular No.112 dated March 25, 2014.Wherever the words or acronyms FPI or FII occur in this document, the meaning and implications must be according to the above Regulations/Notifications, particularly during the transition period as prescribed in these Regulations. ^2 SWF means a Government investment vehicle which is funded by foreign exchange assets, and which manages those assets separately from the official reserves of the monetary authorities. ^4 If the company doesn't have full time Company Secretary, a certificate from practicing Company Secretary may be submitted ^5 To the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Mumbai ^6In terms of AP (DIR Series) Circular No 5 dated July 17, 2014, NIC 2008 codes may be reported * If there is more than one foreign investor/collaborator, separate Annexure may be included for items 3 and 4 of the Form. ^# The investment/s is/are made by FVCI under FDI Scheme in terms of Schedule I to Notification No. FEMA 20/2000-RB dated May 3, 2000. ^¶ SWF mean a Government investment vehicle which is funded....
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....ng manufacturing. (d) A non-resident entity or entities, whether owner of the brand or otherwise, shall be permitted to undertake 'single brand' product retail trading in the country for the specific brand, directly or through a legally tenable agreement with the brand owner for undertaking single brand product retail trading. The onus for ensuring compliance with this condition will rest with the Indian entity carrying out singlebrand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with the above condition. The requisite evidence should be filed with the RBI for the automatic route and to competent authority for cases involving approval. (e) In respect of proposals involving foreign investment beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory....
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....roducts being in the nature of 'state-of-art' and 'cuttingedge' technology where local sourcing is not possible and give recommendations for such relaxation." 5. Inserted vide Press Note No. 4 (2019 Series) dated 18-09-2019 6. Re-numbered vide Press Note No. 4 (2019 Series) dated 18-09-2019 before it was read as "5.2.7.2.3" 7. Substituted vide Press Note No. 1 (2020 Series) dated 21-02-2020 before it was read as "5.2.22 Insurance Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.22.1 (i) Insurance Company (ii) Insurance Brokers (iii) Third Party Administrators (iv) Surveyors and Loss Assessors (v)Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) 49% Automatic" 8. Re-numbered vide Press Note No. 1 (2020 Series) dated 21-02-2020 before it was read as "5.2.22.2" 9. Substituted vide Press Note No. 1 (2020 Series) dated 21-02-2020 before it was read as "Other Conditions (a) No Indian Insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, includ....