Foreign Company wants to invest 100% in Equity shares of an Indian Pvt Ltd.

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A foreign company is exploring two investment routes into a running, 100% export-oriented Indian Private Limited Company. The first option is a 100% equity share acquisition, making the foreign entity the parent company. Alternatively, the foreign company can issue its own shares to the existing shareholders of the Indian company in exchange for their holdings. Advice is sought on the necessary compliances with the Reserve Bank of India (RBI), Registrar of Companies (ROC), and Income Tax authorities for both scenarios.

DEBASISH BODHAK

DEBASISH BODHAK (Querist)
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01 August 2023 1) A foreign company wants to invest 100% in Equity shares of a running Indian Private Limited Company which is 100% export oriented.

2) Alternatively this Foreign company wants to give their foreign shares to the existing shareholders of the said Indian Pvt Ltd. Company.

Please advise me what compliances to be done in respect of RBI, ROC, and Income Tax.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 August 2023 1 Yes a foreign Company can become a Parent company of the Indian Subsidiary holding 100% shares.
See the link for compliance.
https://www.indiafilings.com/foreign-subsidiary-company-compliance
2 yes, it's possible to allot the foreign company shares in lieu of Indian company shares.
See the link for more details.

https://enterslice.com/learning/investment-in-foreign-company-by-indian-individual/#:~:text=What%20is%20the%20Eligibility%20Criteria,share%20in%20an%20Indian%20Company.

DEBASISH BODHAK

DEBASISH BODHAK (Querist)
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05 August 2023 Thanks a lot for your valuable advice.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 August 2023 You are welcome...
....

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 August 2023 You are welcome...
....

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