|
|
|
- Opening
of Branches/Office in India by Foreign Banks
Opening
of branches/offices in India by banks incorporated
abroad (foreign banks) requires permission of
Reserve Bank under section 22 of the Banking
Regulation Act, 1949. Applications for the purpose
should be made to the Chief General Manager,
Department of Banking Operations and Development,
Reserve Bank of India, Central Office, Mumbai.
- Wholly
owned Indian Subsidiary of a Foreign Company
Wholly Owned Subsidiary: means a company formed,
registered or incorporated in accordance with
the laws and regulations of India, whose entire
capital is held by the foreign company.
A
foreign company can commence operations in India
through the incorporation of a company under
the provisions of the Indian Companies Act,
1956. Foreign equity in such Indian companies
can be up to 100 per cent depending on the business
plan of the foreign investor, prevailing investment
policies of the Government and receipt of requisite
approvals.
- Joint
Venture with an Indian Partner by a Foreign
Company
Joint Venture: means a company or a firm
formed, registered or incorporated in accordance
with the laws and regulations of India in which
the foreign company makes a direct investment.
Foreign
companies can set up their operations in India
through incorporation of a company under the
provisions of the Indian Companies Act,1956
by forging strategic partnerships with Indian
partners. The following will be the advantages
to the foreign investor:
Established
contacts of the Indian partner which help smoothen
the process of setting up operations
Established
distribution /marketing set up of the Indian
partner
Available
financial resources of the Indian partner
- Purchase
of shares of Indian companies by persons resident
outside India
A
person resident outside India, may purchase
shares or convertible debentures of an Indian
company. A person resident in India who proposes
to transfer to a person resident outside India,
any share/ convertible debenture of an Indian
company, by way of sale, shall first obtain
Government approval for the transfer and thereafter
apply to the Reserve Bank for its approval,
which may be granted subject to such conditions
as are considered necessary by Reserve Bank,
including the price at which such sale may be
made.
- Acquisition
of Right Shares
Under Regulation 6 of Reserve Bank Foreign Exchange
Management ( Transfer or Issue of Security by
a person resident outside India) Regulations,
2000, an Indian Company may offer to a person
resident outside India, equity or preference
shares or convertible debentures for purchase
on right basis, provided the following conditions
are satisfied:
The
offer on right basis does not result in increase
in percentage of foreign equity already approved,
or permissible under the Foreign Direct investment
Scheme in terms of these Regulations.
The
existing shares or debentures against which
shares or debentures are issued by the company
on right basis were acquired and are held by
the person resident outside India in accordance
with these Regulations
The
offer on right basis to the persons resident
outside India is at a price which is not lower
than that at which the offer is made to the
resident shareholders.
The
right shares or debentures purchased by the
person resident outside India shall be subject
to the same conditions including restrictions
in regard to repatriability as are applicable
to the original shares against which right shares
or debentures are issued provided that the amount
of consideration for purchase of right shares
or debentures is paid by way of inward remittance
in foreign exchange through normal banking channels
or by debit to NRE / FCNR account, when the
shares or debentures are issued on repatriation
basis. In respect of the shares or debentures
issued on non-repatriation basis, the amount
of consideration may also be paid by debit to
NSO/ NRSR/ NRNR account.
- Transfer
of shares and convertable debentures of an Indian
company by a person resident outside India to
a person resident outside India
A
person resident outside India (not being a non-resident
Indian or overseas corporate body), may transfer
by way of sale, the shares or convertible debentures
held by him to any person resident outside India
provided the person to whom the shares are being
transferred has obtained prior permission of
Central Government to acquire the shares.
A non-resident Indian or an overseas corporate
body may transfer by way of sale, the shares
or convertible debentures held by him or it,
to another non-resident Indian or an overseas
corporate body only.
A
person resident outside India may transfer any
security held by him, to a person resident outside
India by way of gift.
|
|
|
|
|
