One of my clients has just started the electric vehicle maufacturing concern as a private limited company. He would like to recevie FDI to the extent of 10% of share value. The foreign company will have 10% share in the indian company. Whether the foreign contribution can be transferred to the indian company's bank account under AUTOMATIC APPROVAL ROUTE under FDI POLICY. Is there any other formalities. The total capital would be 10 crores and the FDI would be 1 crore ie 10% share. Pls guide me.
17 June 2013
Is fcra not for associations receiving foreign contributions? This is manufacturing pvt ltd company issuing shares to foreign company. The foreign company is going to be one of the shareholders in the indian pvt ltd company. Pls advise.
If the foreign company already have 10% shares in the company and want to take further shares, please check FDI norms on sectoral cap, up to which a foreign investor can take shares of that Indian company.
For more details, read Master Circular issued by RBI on FDI on july 1, 2012.
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