Share subscription - foreign national

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2016 Dear Sir,

Please let me know procedure for allotment of share in case of a Private Limited Company, incorporated for Tourism Business, incorporated under automatic route in India, without taking approval from RBI & Forex, which is guess is correct.
Now company is in process of opening bank account, I need to know procedure for share allotment in case of Foreign National being the subscriber as per MOA.

Pratik Shah

Pratik Shah (Expert)
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24 August 2016 Foreign National can invest in shares only when he remits money through normal banking channel or other allowable routes. So, before issuing shares, you have to first open a bank account.
Once the Bank account is opened, you will have to ask Foreign national to remit the exact amount in rupees as subscribed in AOA. You need do FIRC Reporting to Bank within 30 days from the date of remittance. After receiving money, you need to pass resolution to allot shares to subscribers and within 30 days of such allotment/issuance, you need to do FCGPR reporting to RBI.

Kindly have a look at FDI reporting guidelines on RBI website for more details.