Nikhil Kalra (CS Final Student) (85 Points)
30 June 2010Dear Sir,
My Query is:
A Person resident outside india wants to purchase shares of an existing indian Company.
Please tell me what is the procedure and also tell me is there any cap for purchasing the shares of indian company by person resident outside india.
Ashish Gupta
(CS & Legal)
(114 Points)
Replied 30 June 2010
Cap on investment by Non Resident depends upon the sectoral policy of RBI. The New Consolidated policy of DIPP provides for cap of foreign investment in each sector.
Further, a Non-Resient can acquire shares in Resident Company by way of following methods:
1. Purchase from existing shareholders
2. Fresh allotment by the Indian Company
In case of purchase of existing shareholders, Form FC-TRS needs to be filed with RBI and in case of fresh allotment by Indian Company, Form FC-GPR shall be filed with RBI. Pricing of shares shall be kept in accordance with DCF menthod. The detailed process for RBI compliance is mentioned in FDI Policy.
Further, compliance of Companies Act shall also be done in this regard.
Hope this clarifies.
Regards,
Ashish
Master GSTR-9 and 9C with India's First Unique Live Course with Live practical training
CAclubindia
