Share Transfer from NRI to NR

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 May 2011 Hello Friends,
My query can a NRI who is a shareholder of the pvt ltd company transfer its shares to foreign company if yes please tell me the procedure to be followed in such case?
Also if the after transferring shares that foreign company wants to give loan to such pvt ltd company then what are the compliances?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
Follow

27 May 2011 Yes the same can be done Here there will issues under Income tax and the same needs to be thoroughly examined before taking any decision.

Also some procedural requirements under FEMA such as filing of form etc need to be also done.

Anuj
0-9810106211

Juzer Sadikot

Juzer Sadikot (Expert)
Follow

29 May 2011 With due respect to CA. Anuj Guptaji's expert opinion, I understand following:

Scenario # 1

NRI acquired Shares when he was resident in India or inherited from a person who was resident in India:

Yes, the proposed transfer may be allowed (Section 6(5) of FEMA 99)

Scenario # 2

Acquired as NRI:

No, the proposed transfer of Share may not be allowed unless NRI obtains prior approval from RBI[Regulation 3 read with Regulation 9(1) and Regulation 9(2) of FEM (TIS) Regulation 2000]

Further, I feel that Loan from NR to Pvt Co may involve lots of issues and compliance. This needs to be examine.

Regards
CA Juzer