NRI Investments in India
NRIs can invest through designated ADs, on repatriation and non-repatriation basis under.
Repatriation Basis:
Payment for purchase of shares and/or debentures on repatriation basis has to be made by way of inward remittance of foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India.
Non-Repatriation Basis:
Payment for purchase of shares and/or debentures on non-repatriation basis can be made by way of inward remittance of foreign exchange through normal banking channels or out of funds held in NRE/FCNR/NRO account maintained in India.
Compliances by the Company:
If the shares are to be allocated on non-repatiration basis, company need not to file any documents with AD, however, the valuation norms are to adhered with. In case of allotment of shares on repatiration basis, the following are compliances;
a. Filing of ARF with AD within 30days from the date, money hits the account;
b. Filing of form Fc-GPR within 30days from the date of allocation of Shares;
c. Form FLA every year on or before July 15.
Brief on Exit Mechanism.
AD Category – I bank can allow the remittance of sale proceeds of a security (net of applicable taxes) to the seller of shares resident outside India, provided the security has been held on repatriation basis, the sale of security has been made in accordance with the prescribed guidelines and NOC / tax clearance certificate from the Income Tax Department has been produced.
Note: Please note that the FEMA Laws are highly dynamic, therefore it is advisable to take opinions before any actions.
Source: RBI
