Formation of investment company

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Payal Sanghani (Querist)
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05 January 2016 My friend wants to open a purely investment company. The amount of investment will be around 100 crores. It will be invested either by purchasing shares of pvt. ltd. or public ltd. co. or purchasing of land. The amount received from investors will be in foreign currency. My queries are:
1. Whether such company will be termed as NBFC?
2. If not NBFC then what will be the type of company?
3. Whether foreign money can used to buy shares or purchase land in india?

praveen

praveen (Expert)
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05 January 2016 1) It wont be termed as an NBFC. In case you want to form NBFC then you need to approach RBI.
2) It will be normal company where shares are issued for cash and further you can use the same company as holding company for any other businesses you would want to start.
3) Foreign money in land has restrictions under FEMA. I dont think it is possible to buy land.

Payal Sanghani

Payal Sanghani (Querist)
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05 January 2016 If its a normal company then I will have to make investors as shareholders first right? Also then normal provisions of Companies Act will be applicable.

praveen

praveen (Expert)
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05 January 2016 Yes normal provisions of companies act will apply. Only concern for you would be FEMA. Check with a FEMA expert.

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