Foreign Exchange Management (Mode of Payment and Reporting of Non- Debt Instruments) (Third Amendment) Regulations, 2025

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....agement (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 [Notification No. FEMA.395/2019-RB dated October 17, 2019] (hereinafter referred to as 'the Principal Regulations) namely:- 1. Short Title & Commencement.- (1) These Regulations may be called the Foreign Exchange Management (Mode of Payment and Reporting of Non- Debt Instruments) (Third Amendment) Regulations, 2025. (2) They shall come into force from the date of their publication in the Official Gazette. 2. In the principal regulations, in regulation 3.1,for the existing provision at Sl. No. I, II, VI, VII, VIII and IX the following shall be substituted, namely: Schedule of the Rules Instructions on Mode of payment and Remitt....

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....y issuing equity instruments under this Schedule may open a foreign currency account with an Authorised Dealer in India in accordance with Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2016. B. Remittance of sale proceeds The sale proceeds (net of taxes) of the equity instruments may be remitted outside India or may be credited to any repatriable foreign currency or Rupee account of the person concerned, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. II. Schedule II (Investments by Foreign Portfolio Investors) A. Mode of payment (1) The amount of consideration shall be paid as inward remittanc....

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....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) Unless otherwise specified in these regulations or the relevant Schedules, the foreign currency 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 Rupe....

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....mpany shall be in compliance with the Foreign Exchange Management (Overseas Investment) Rules, 2022. 3. In the principal regulations, in regulation 3, for the existing sub-regulation 3.2 the following shall be substituted, namely; "Issue of Convertible Notes by an Indian start-up company: A start-up company issuing convertible notes to a person resident outside India shall receive the amount of consideration by inward remittance through banking channels or by debit to any repatriable foreign currency or Rupee account of the person concerned, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. Repayment or sale proceeds may be remitted outside India or credited to any repatriab....