Person as resident under fema

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P.C. Joshi (Querist)
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10 September 2011 Dear Friends,

Pls let me know your views on the following issues under FEMA.

1. An Indian company having two shareholders which includes a director who stays in India more than 182 days in last three F.Y. but having citizenship of Australia. What will be hs status under FEMA i.e Resident or Non resident.

2. If the aforesaid shareholder transfers his shareholding to a Non Resdent company is it valid transactions for the purpose of compliance of form FC TRS

3.If a foreign sharehlder in an Indian company transfers his shareholding to another foreign shareholder does this transtion require to file form FC TRS with RBI. According to me . No.

Thanks & Regards

P.c. Joshi

CS Bijoy

CS Bijoy (Expert)
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14 September 2011 1) 182 day is required in each previous year.
2) Transfer can be possible but the sectoral cap for foreign Investment can not exceed if exceed than RBI approval required to be obtained.

P.C. Joshi

P.C. Joshi (Querist)
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14 September 2011 Dear Bijay,

thanks. can you pls comment specifically on my query no.1 beause the answer to transferrability of shares by such a person is to be guided accordingly. i want to know what will be his status under FEMA if he is a person of indian origin having Austratian Citizenship. you mean to say if he is in India for 182 days or more in each F.y. he is a citizen irrespective of citizenship?

thanks

P.C. Joshi

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Sudhag

Sudhag (Expert)
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29 September 2011 He shall be resident for the purpose of FEMA. As under FEMA the residential status of invidual is determinant on the number of days he /she is residing in India in a preceding FINANCIAL YEAR and the citizenship of any other country will not effect.

Under FEMA the residential status is defined IN Section 2(v) which states as follows

"person resident in India" means—

(i)
a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include—

(A)
a person who has gone out of India or who stays outside India, in either case—

(a)
for or on taking up employment outside India, or

(b)
for carrying on outside India a business or vocation outside India, or(c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than—

(a) for or on taking up employment in India, or

(b) for carrying on in India a business or vocation in India, or

(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,

(iii) an office, branch or agency in India owned or controlled by a person resident outside India,

(iv) an office, branch or agency outside India owned or controlled by a person resident in India

Regards,
CA. Sudha G. Bhushan
sudhag999@gmail.com