forieng direct investment
This query is : Resolved
11 February 2011
dear frends and seniors pls help me out actully my company is going to work in fdi they decieded to bring fund thro FDI of forieng clints and form company in india and being a company secretary they want me to look into the matter i dont have any idea of FDI and releted issues in term of tax and secretarial pls guide me
12 February 2011
Secretarial Issues:
1. Need to comply with the all the Compliances related to " Transfer or Issue of Security to person resident outside India"
2. A Non resident entity can invest in India subject to FDI Policy.
3. The Capital Instrument should be issued within 180 days from the date of receipt of inward remittance.
4.Issue Price of the Shares will be in accordance with the Guidelines issued by the erstwhile Controller of Capital Issue. ( CCI)
5.General permission is also available for issue of shares /preference shares against lump sum technical know how fees, royalty under automatic route or SIA/FIPB route subject to pricing guidelines of SEBI/CCI and compliance with applicable tax laws.
There is a proper reporting system in two stages after receipt of Investment from the Foreign Company.( by the Indian Entity)
On receipt of share application money :
Within 30 days of receipt of share application money/amount of consideration from the non-resident investor, the Indian company is required to report to the Regional Office concerned of the Reserve Bank of India, under whose jurisdiction its Registered Office is located, the Advance Reporting Form, containing the following details :
Name and address of the foreign investor/s;
Date of receipt of funds and the Rupee equivalent;
Name and address of the authorised dealer through whom the funds have been received;
Details of the Government approval, if any; and
KYC report on the non-resident investor from the overseas bank remitting the amount of consideration
Upon issue of shares to non-resident investors :
Within 30 days from the date of issue of shares, a report in Form FC-GPR- PART A together with the following documents should be filed with the Regional Office concerned of the Reserve Bank of India.
Certificate from the Company Secretary of the company accepting investment from persons resident outside India certifying that:
The company has complied with the procedure for issue of shares as laid down under the FDI scheme as indicated in the Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time.
The investment is within the sectoral cap / statutory ceiling permissible under the Automatic Route of the Reserve Bank and it fulfills all the conditions laid down for investments under the Automatic Route, namely-
a) Non-resident entity/ies - (other than individuals), to whom it has issued shares have existing joint venture or technology transfer or trade mark agreement in India in the same field and Conditions stipulated at Paragraph 4.2 of the Consolidated FDI policy Circular of Government of India have been complied with
Reporting of Inflow to RBI within 30 days from the date of the receipt in Advance Reporting Form.
1. Need to comply with the all the Compliances related to " Transfer or Issue of Security to person resident outside India"
2. A Non resident entity can invest in India subject to FDI Policy.
3. The Capital Instrument should be issued within 180 days from the date of receipt of inward remittance.
4.Issue Price of the Shares will be in accordance with the Guidelines issued by the erstwhile Controller of Capital Issue. ( CCI)
5.General permission is also available for issue of shares /preference shares against lump sum technical know how fees, royalty under automatic route or SIA/FIPB route subject to pricing guidelines of SEBI/CCI and compliance with applicable tax laws.
There is a proper reporting system in two stages after receipt of Investment from the Foreign Company.( by the Indian Entity)
On receipt of share application money :
Within 30 days of receipt of share application money/amount of consideration from the non-resident investor, the Indian company is required to report to the Regional Office concerned of the Reserve Bank of India, under whose jurisdiction its Registered Office is located, the Advance Reporting Form, containing the following details :
Name and address of the foreign investor/s;
Date of receipt of funds and the Rupee equivalent;
Name and address of the authorised dealer through whom the funds have been received;
Details of the Government approval, if any; and
KYC report on the non-resident investor from the overseas bank remitting the amount of consideration
Upon issue of shares to non-resident investors :
Within 30 days from the date of issue of shares, a report in Form FC-GPR- PART A together with the following documents should be filed with the Regional Office concerned of the Reserve Bank of India.
Certificate from the Company Secretary of the company accepting investment from persons resident outside India certifying that:
The company has complied with the procedure for issue of shares as laid down under the FDI scheme as indicated in the Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time.
The investment is within the sectoral cap / statutory ceiling permissible under the Automatic Route of the Reserve Bank and it fulfills all the conditions laid down for investments under the Automatic Route, namely-
a) Non-resident entity/ies - (other than individuals), to whom it has issued shares have existing joint venture or technology transfer or trade mark agreement in India in the same field and Conditions stipulated at Paragraph 4.2 of the Consolidated FDI policy Circular of Government of India have been complied with
Reporting of Inflow to RBI within 30 days from the date of the receipt in Advance Reporting Form.
12 February 2011
thanks a lot aditi can pls give me ur email id so that i can approach u in case any diff if u dont mind
12 February 2011
Welcome, Its cooladitibidasaria@rediffmail.com.
13 February 2011
The point no. 4 (in aditi's mail)is not correct as now the method has been changed to DCF method .
Also lot of things from the taxation angle also needs to be seen before forming any company in India.
Anuj Gupta
9810106211
Also lot of things from the taxation angle also needs to be seen before forming any company in India.
Anuj Gupta
9810106211
14 February 2011
Few months ago the government changed the foreign direct investment (FDI) pricing guidelines for unlisted companies. Earlier foreign investments in unlisted companies were to be made a minimum floor price at a valuation determined by the Controller of Capital Issues (CCI) guidelines. Now effective late last month the valuation will have to be done at a discounted cash flow method.
Thanks Anujji, for updating us.
Thanks Anujji, for updating us.
14 February 2011
The norms for pricing guidelines were revised in April 2010 and not late last month.
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