Investment in indian co. by nr co. (exact remittance in rs)

Save Share

This query is : Resolved

Padma (Querist)

10 August 2012 Pls advice me as to by what are all the ways a NR company can remit the consideration in cash, for shares in Indian company, by the exact amount.
For instance, A Singapore company wants to invest in shares of Indian company (100 shares of Rs.10/- each). It remits $22.22/-, the Rupee/SGD rate being Rs45/-, on the date of remittance. But due to the Forex fluctuations, the Rupee/SGD rate becomes Rs46/SGD or Rs44/SGD and the amount received by the indian company will be more or less than the capital amount. If the singapore company wants to make sure it remits only Rs.100000/- and nothing more or less, what steps can it take?
1) Do we have any facility to transfer such amount through Indian Rupee draft or through any other mode?
2) Do we have any RBI / FDI regulations that need to be complied with regarding the above transaction (1)?
3) What are all the procedures that need to be followed by both the companies remitting/receiving the exact amount, with regards to FDI.

Kindly answer this query at the earliest,
Thanks in advance.

Amol S Joglekar

Amol S Joglekar (Expert)

17 August 2012 if the investment falls under DIRECT route, no separate permission from RBI is required.We need not be so touchy or panic or sensitive or meticulous or mathematically accurate for the amount of 1 lakh. The share capital shall be 1 lakh and the fluctuation loss/ gain can be booked.. no problem. We need not press for such a situation. Another way out could be western union money transfer where receipient gets 1 lakh exact amount for the singapor dollars bought at singapore at the then conversion rate.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now