Capital reduction of a 100% foreign subsidiary of indian co
This query is : Resolved
11 January 2016
A Ltd is a Company resident in India having a 100% foreign subsidiary in Singapore (say B Ltd) . B Ltd was set up to purchase a mining asset with the help of C Ltd domiciled in Indonesia. 50% of the investments made by A Ltd in B Ltd is lying unutilised. Now A Ltd wants to bring back the unutilised investment in B Ltd through the Capital Reduction route.
My query is, what are the guidelines available or laws with regards to this available in India ? What the RBI guidelines, if any, with regards to this ? Is there any other restrictions?
Waiting for a quick reply.
My query is, what are the guidelines available or laws with regards to this available in India ? What the RBI guidelines, if any, with regards to this ? Is there any other restrictions?
Waiting for a quick reply.
Guest
Guest
(Expert)
16 January 2016
"A JV / WOS set up by the Indian Party as per the Regulations may diversify its activities / set up step down subsidiary / alter the shareholding pattern in the overseas entity (subject to compliance of Regulation 7 of the Notification ibid, in the case of financial services sector companies). The Indian Party should report to the Reserve Bank through the AD Category - I bank, the details of such decisions within 30 days of the approval of those decisions by the competent authority of the JV / WOS concerned in terms of local laws of the host country and include the same in the Annual Performance Report (APR - Part III of Form ODI) required to be forwarded to the AD Category-I bank.". Capital reduction is also a type of altering share holding pattern as described above. Consequently, you may do it and report in 30 days.
16 January 2016
Thanks Karthikeyan.Shall get back soon.
16 January 2016
But A Ltd (the Indian Party) is a manufacturing Company. Will this Regulation apply to it?
Guest
Guest
(Expert)
16 January 2016
Pls check the PM i have sent you in this regard
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