Committed to maintain integrity in efforts,
dedication towards work and excellence in results

Overview

After the introduction of liberal policies and being one of the fastest growing economies of the world, India has emerged as the most preferred destination for Foreign Direct Investment (FDI).

The country is benefitted as the investments received through FDI are used for development and technological advancement that leads to better job opportunities and prosperity. On the other hand, the investing country receives a lucrative opportunity to expand their business internationally.

How to make FDI in India

In India, there are two ways in which FDI can be made:

  • Automatic Route: In this process, approval from Reserve Bank of India or Government of India is not needed.

  • Government Route: In this process, approval from Foreign Investment Promotion Board (FIPB), Ministry of Finance, and Government of India is needed.

The processes are industry/sector specific and based on the FDI policy of the Government of India. There are some sectors such as atomic energy, real estate business, and manufacturing of tobacco projectsthat are not open for FDI at present.

Process

The following are the step-wise stages to receive and regularize the FDI:

  • Indian company receives the capital inflow through banks notified by Reserve Bank of India to operate as an Authorized Dealer (AD)

  • AD branch reports the received capital inflow to RBI through R-Forms

  • The Indian companythat has received investment from a foreign company for issuance of shares has to inform concerned RBI branch through AD within 30 days. Non-compliance is considered in contravention under FEMA, 1999 and would attract penal provisions

  • RBI branch will issue a Unique Identification Number

  • Shares or any other equity instruments should be issued by the Indian company receiving the investment within 180 days from the receipt of FDI. If shares are not issued for any reason, the entire amount has to be refunded. Non-compliance is considered in contravention under FEMA, 1999 and would attract penal provisions

Following documents are needs to be enclosed with FC-GPR:

  • Certificate from Company Secretary certifying that all the provisions of The Indian Companies Act, 1956, have been complied with, approvals terms & conditions have been met, all the original certificates issued by AD are in possession of the company, and the company is eligible to issue shares

  • Certificate of Chartered Accountant showing the process adopted to arrive at the price of the shares issued.

Overview

After the introduction of liberal policies and being one of the fastest growing economies of the world, India has emerged as the most preferred destination for Foreign Direct Investment (FDI).

The country is benefitted as the investments received through FDI are used for development and technological advancement that leads to better job opportunities and prosperity. On the other hand, the investing country receives a lucrative opportunity to expand their business internationally.

How to make FDI in India

In India, there are two ways in which FDI can be made:

  • Automatic Route: In this process, approval from Reserve Bank of India or Government of India is not needed.

  • Government Route: In this process, approval from Foreign Investment Promotion Board (FIPB), Ministry of Finance, and Government of India is needed.

The processes are industry/sector specific and based on the FDI policy of the Government of India. There are some sectors such as atomic energy, real estate business, and manufacturing of tobacco projectsthat are not open for FDI at present.

Process

The following are the step-wise stages to receive and regularize the FDI:

It also needs approval of Reserve Bank of India.
The main permissible activities of branch officesare:

  • Indian company receives the capital inflow through banks notified by Reserve Bank of India to operate as an Authorized Dealer (AD)

  • AD branch reports the received capital inflow to RBI through R-Forms

  • The Indian companythat has received investment from a foreign company for issuance of shares has to inform concerned RBI branch through AD within 30 days. Non-compliance is considered in contravention under FEMA, 1999 and would attract penal provisions

  • RBI branch will issue a Unique Identification Number

  • Shares or any other equity instruments should be issued by the Indian company receiving the investment within 180 days from the receipt of FDI. If shares are not issued for any reason, the entire amount has to be refunded. Non-compliance is considered in contravention under FEMA, 1999 and would attract penal provisions

Following documents are needs to be enclosed with FC-GPR:

  • Certificate from Company Secretary certifying that all the provisions of The Indian Companies Act, 1956, have been complied with, approvals terms & conditions have been met, all the original certificates issued by AD are in possession of the company, and the company is eligible to issue shares

  • Certificate of Chartered Accountant showing the process adopted to arrive at the price of the shares issued.