A. Time period for Issue of Certificate:
Exception: In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the RBI, on the merits of the case.
B. Issue price of shares
Price of shares issued to persons resident outside India under the FDI Policy, shall not be less than –
Allotment of Shares:
i. Listed Shares: – The price worked out in accordance with the SEBI guidelines, as applicable.
ii. Non-Listed Shares:-
– SEBI registered Merchant Banker or
– A Chartered Accountant as per any internationally accepted pricing methodology on arm’s length basis.
Where non-residents (including NRIs) are making investments in an Indian company in compliance with the provisions of the Companies Act, as applicable, by way of subscription to its Memorandum of Association, such investments may be made at Face Value subject to their eligibility to invest under the FDI scheme.
C. Reporting of FDI:
Reporting of Amount Consideration:-
An Indian company receiving investment from outside India for issuing shares/convertible debentures/preference shares under the FDI Scheme, should report the details of the amount of consideration to the Regional Office concerned of the Reserve Bank not later than 30 days from the date of receipt in the Advance Reporting.
Reporting of Receipt of Money:-
Indian companies are required to report the details of the receipt of the amount of consideration for issue of shares/convertible debentures, through an AD Category-I bank, together with a
Unique Identification Number–
The report would be acknowledged by the Regional Office concerned, which will allot a Unique Identification Number (UIN) for the amount reported.
Reporting of Issue of Shares–
After issue of shares the Indian company has to file Form FC-GPR, not later than 30 days from the date of issue of shares.
– Condition of FCGPR:
– Signing of FCGPR: Form FC-GPR has to be duly filled up and signed by Managing Director/Director/Secretary of the Company and submitted to the Authorized Dealer of the company, who will forward it to the Reserve Bank.
– Documents to be Submit: The following documents have to be submitted along with the form:
a. Certificate from Company Secretary: A certificate from the Company Secretary of the company certifying that:
– All the requirements of the Companies Act, as applicable, have been complied with
– Terms and conditions of the Government of India approval, if any, have been complied with
– The company is eligible to issue shares under these Regulations; and
– The company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration
b. Valuation Certificate:
A certificate from SEBI registered Merchant Banker or Chartered Accountant indicating the manner of arriving at the price of the shares is Indiad to the persons resident outside India.
c. Proof of receipt of Consideration: The report of receipt of consideration.
d. Submission of Form: Form FC-GPR have to be submitted by the AD Category-I bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the registered office of the company is situated.
D. Annual return on Foreign Liabilities and Assets:
(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at firstname.lastname@example.org)
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. The observations of the author are personal view and the authors do not take responsibility of the same and this cannot be quoted before any authority without the written consent of the author.