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Loan from non indian company to indian company

Bhagwat Chouhan (none) (29 Points)

20 November 2012

Hello CAClubIndia Team,

We have registered a Pv.t Ltd. software firm in India and it's only a month old.

Is it possible for the Indian Pvt. Ltd. firm to get loan from non indian company ?

Suppose the Indian campany want to raise it's capital by gettting the capital from non Indian company i.e. a company based in UK. What are the possible and best ways to get it done ?

We want the loan to be interest free and unsecured. Please help us to get the most feasible way to achieve it. Also please let us know the steps to be taken to achive it ?

Thanks in advance.

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2 Replies

saurabh jain (Audit Specialist) (271 Points)
Replied 28 November 2012

Hi Bhagwat,

You can take the loan from a Non Indian company. But there will be compliance to FEMA and other acts. In which city you are?

Regards,

Sourabh Jain

ANTONY EDGAR (CA in Practice) (89 Points)
Replied 28 November 2012

Since your are looking for a interest free and unsecured loan. The best way to bring the money is as capital. Foreign Companies can invest in india as per the FEMA Guidelines. Your company can receive the money as FDI under two ways. One is Automatic Route, under this if your company falls under the sector specified in FDI policy, then prior approval of RBI or the Govt is not required. If it does not fall under the categories specified in FDI policy, Then prior approvak of various govt bodies are requires such as FIPB, Ministry of Finance etc...