FEMA queries
This query is : Resolved
10 May 2010
Dear Expert,
pls reply:
If Indian base company (Incorporated as under Indian Companies Act, 1956)would like to buy shares of other Company (group Company) which is incorporated & registered out side india say in Singapore, What will be procedure for the same?
and what are compliances as under FEMA Act, 1999 from our point of View (Indian Company)?
Thanking you,
Somnath KK
pls reply:
If Indian base company (Incorporated as under Indian Companies Act, 1956)would like to buy shares of other Company (group Company) which is incorporated & registered out side india say in Singapore, What will be procedure for the same?
and what are compliances as under FEMA Act, 1999 from our point of View (Indian Company)?
Thanking you,
Somnath KK
07 March 2011
Under automatic route , up to 400% net worth of investing company in its foreign subsidiary or JV Company.
If your Indian Company net worth is say Rs 1 Crore , you can invest up to 4 Crores under automatic route in the WOS / JV company in foreign country.
How Much can be invested in WOS / JV by an Indian Listed Company ?
As per RBI guidelines , if there is no JV or WOS , Listed Indian companies can invest up to 50 % of their net worth as on the date of the last audited Balance Sheet in overseas companies, listed on a recognized stock exchange, or by way of rated debt securities issued by such companies by way of portfolio investment.
If your Indian Company net worth is say Rs 1 Crore , you can invest up to 4 Crores under automatic route in the WOS / JV company in foreign country.
How Much can be invested in WOS / JV by an Indian Listed Company ?
As per RBI guidelines , if there is no JV or WOS , Listed Indian companies can invest up to 50 % of their net worth as on the date of the last audited Balance Sheet in overseas companies, listed on a recognized stock exchange, or by way of rated debt securities issued by such companies by way of portfolio investment.
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