20 August 2013
Dear Remesh Any investment made by a person resident outside India including NRI or an entity incorporated outside India is treated as Foreign Direct Investment (FDI) and subject to the FDI Policy of the Government of India. NRIs are permitted to invest in shares of Indian companies under FDI Scheme on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels. As stated in your query that at the time of investment investor is NRI hence investment is treated as FDI and subject to FEMA compliances such as intimation of FIRC, filling of FCGPR and other compliances. One interesting point to be noted that recently, in case of Jet-Etihad deal Department of Industries Policy and Promotion has decided not to treat the investments of Jet’s NRI owner Naresh Goyal in the proposed Rs 2,058-crore joint venture as foreign direct investment. In case of any further clarification please feel free to contact.
CA Laxmikant Saini laxmikant_saini84@yahoo.co.in 09310832563
CAclubindia
