Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI Scheme allowed under the Government route - আরবিআই - Reserve Bank of India
Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI Scheme allowed under the Government route
RBI/2010-11/586 June 30, 2011 To All Authorised Dealer Category-I Banks Madam / Sir, Foreign Direct Investment (FDI) in India - Issue of equity shares under the Attention of Authorised Dealers Category – I (AD Category - I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. 2. In terms of the Schedule 1 of the Notification, ibid, an Indian company may, under the automatic route, issue equity shares/ preference shares to a person resident outside India, being a provider of technology / technical know-how and against royalty / lumpsum fees due for payment subject to certain conditions like entry route, sectoral cap, pricing guidelines and compliance with the applicable tax laws. 3. The extant guidelines for issue of equity shares/ preference shares under the Government route have been reviewed in consultation with the Government of India and, accordingly, it has been decided to permit issue of equity shares / preference shares under the Government route of the FDI scheme for the following categories of transactions: (I) Import of capital goods/ machineries / equipments (including second-hand machineries), subject to compliance with the following conditions:
(II) Pre-operative/pre-incorporation expenses (including payments of rent, etc.) subject to compliance with the following conditions:
4.(i) All requests for conversion should be accompanied by a special resolution of the company. 5. These directions have been issued with reference to the relevant paras of the Consolidated FDI Policy Circular 1 of 2011 dated March 31, 2011, issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India. 6. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 7. Necessary amendments to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 will be issued separately. 8. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Meena Hemchandra) |