Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019

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....n these regulations, unless the context requires otherwise, - a) 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999); b) 'Rules' means Foreign Exchange Management (Non-Debt Instrument) Rules, 2019; c) The words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act or the Rules. 3. Mode of Payment and Remittance of sale proceeds: 3.1 Schedule of the Rules Instructions on Mode of payment and Remittance of sale proceeds I. Schedule I (Purchase or sale of equity instruments of an Indian company by a person resident outside India) A. Mode of payment (1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/Escrow account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. Explanation : The amount of consideration shall include: (i) Issue of equity shares by an Indian company against any funds payable by it to the investor (ii) Swap of equity instruments. (2) Equity instruments shall be issued to the person resi....

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....mittance from abroad through banking channels or out of funds held in a Non-Resident External (NRE) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. (2) The NRE account will be designated as an NRE (PIS) Account and the designated account shall be used exclusively for putting through transactions permitted under this Schedule. (3) Investment in units of domestic mutual fund shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B) account.  (4) Subscription to National Pension System shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/NRO account. B. Remittance of sale proceeds The sale proceeds (net of taxes) of equity instruments may be remitted outside India or may be credited to NRE (PIS) account of the person concerned. The sale proceeds (net of taxes) of units of mutual funds and subscription to National Pension System may be remitted outside India or may be credited to NRE (PIS)/FCNR(B)/NRO account of the person concerned at the option of the NRI/OCI....

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....s or out of funds held in NRE or FCNR(B) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. B. Remittance of disinvestment proceeds The disinvestment proceeds may be remitted outside India or may be credited to NRE or FCNR(B) account of the person concerned. VII. Schedule VII (Investment by a Foreign Venture Capital Investor) A. Mode of payment (1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/or a Special Non-Resident Rupee (SNRR) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. (2) The foreign currency account and SNRR account shall be used only and exclusively for transactions under this Schedule. B. Remittance of sale/maturity proceeds The sale/maturity proceeds (net of taxes) of the securities may be remitted outside India or may be credited to the foreign currency account or a Special Non-resident Rupee Account of the FVCI. VIII. Schedule VIII (Investment by a person resident outside In....

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....I or an LLP which has received investment by way of capital contribution in the previous year including the current year, shall submit form FLA to the Reserve Bank on or before the 15th day of July of each year. Explanation: Year for this purpose shall be reckoned as April to March. (3) Form Foreign Currency-Transfer of Shares (FC-TRS): (a) Form FCTRS shall be filed for transfer of equity instruments in accordance with the rules, between: i. a person resident outside India holding equity instruments in an Indian company on a repatriable basis and person resident outside India holding equity instruments on a non-repatriable basis; and ii. a person resident outside India holding equity instruments in an Indian company on a repatriable basis and a person resident in India, The onus of reporting shall be on the resident transferor/transferee or the person resident outside India holding equity instruments on a non-repatriable basis, as the case may be. Note: Transfer of equity instruments in accordance with the rules by way of sale between a person resident outside India holding equity instruments on a non-repatriable basis an....