Share transfer of foreign company from NRI to Indian person.
This query is : Resolved
01 December 2022
what is the process of share transfer from NRI to RI of foreign company, and approval from RBI and what documents want to submit. can i paid consideration in INR OR not.
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01 December 2022
No formalities in case of INR payment.
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25 July 2025
Here's a detailed overview of the share transfer process of a foreign company from an NRI to a resident Indian (RI) along with RBI approval and payment considerations:
1. Share Transfer from NRI to Resident Indian (RI) in a Foreign Company
When an NRI transfers shares of a foreign company to an Indian resident, this transaction is generally governed by Foreign Exchange Management Act (FEMA) and RBI regulations.
The key points depend on whether the foreign company is listed or unlisted and the source and mode of payment.
2. RBI Approval
In most cases, no prior RBI approval is required for transfer of shares of a foreign company from NRI to an Indian resident if the transaction complies with FEMA guidelines.
However, the Reserve Bank of India (RBI) or Authorized Dealer (AD) banks may require:
Declaration about source of funds
Reporting of the transaction under Lodgment of Foreign Inward Remittance Certificate (FIRC) or FEMA return filings.
3. Payment in INR or Foreign Currency
If payment is made in Indian Rupees (INR):
No formalities required under FEMA, as per your note, this is straightforward with no special RBI approvals needed.
If payment is made in Foreign Currency:
The payment should be routed through Authorized Dealer (AD) banks or through permissible channels as per RBI.
The AD bank may require declarations regarding the source and purpose of funds.
The transaction may need to be reported by filing Form FC-GPR or similar forms if the foreign company is listed or regulated under specific provisions.
The transaction may require compliance with LRS (Liberalized Remittance Scheme) limits or other RBI guidelines applicable to residents.
4. Documents Usually Required
Share Transfer Agreement / Deed duly signed by transferor (NRI) and transferee (Indian resident)
Original Share Certificates or Demat statements
KYC documents of both parties (PAN, Aadhaar, Passport for NRI)
Proof of payment receipt (bank statement, transaction receipt)
Declaration/undertaking as per FEMA guidelines from the buyer and seller
Any RBI/AD bank approvals or NOCs if applicable
5. Additional Considerations
The transaction should comply with Indian Income Tax laws on capital gains.
NRI may need to file TDS (Tax Deducted at Source) on capital gains.
Reporting of transaction to RBI through AD bank is important to maintain regulatory compliance.
1. Share Transfer from NRI to Resident Indian (RI) in a Foreign Company
When an NRI transfers shares of a foreign company to an Indian resident, this transaction is generally governed by Foreign Exchange Management Act (FEMA) and RBI regulations.
The key points depend on whether the foreign company is listed or unlisted and the source and mode of payment.
2. RBI Approval
In most cases, no prior RBI approval is required for transfer of shares of a foreign company from NRI to an Indian resident if the transaction complies with FEMA guidelines.
However, the Reserve Bank of India (RBI) or Authorized Dealer (AD) banks may require:
Declaration about source of funds
Reporting of the transaction under Lodgment of Foreign Inward Remittance Certificate (FIRC) or FEMA return filings.
3. Payment in INR or Foreign Currency
If payment is made in Indian Rupees (INR):
No formalities required under FEMA, as per your note, this is straightforward with no special RBI approvals needed.
If payment is made in Foreign Currency:
The payment should be routed through Authorized Dealer (AD) banks or through permissible channels as per RBI.
The AD bank may require declarations regarding the source and purpose of funds.
The transaction may need to be reported by filing Form FC-GPR or similar forms if the foreign company is listed or regulated under specific provisions.
The transaction may require compliance with LRS (Liberalized Remittance Scheme) limits or other RBI guidelines applicable to residents.
4. Documents Usually Required
Share Transfer Agreement / Deed duly signed by transferor (NRI) and transferee (Indian resident)
Original Share Certificates or Demat statements
KYC documents of both parties (PAN, Aadhaar, Passport for NRI)
Proof of payment receipt (bank statement, transaction receipt)
Declaration/undertaking as per FEMA guidelines from the buyer and seller
Any RBI/AD bank approvals or NOCs if applicable
5. Additional Considerations
The transaction should comply with Indian Income Tax laws on capital gains.
NRI may need to file TDS (Tax Deducted at Source) on capital gains.
Reporting of transaction to RBI through AD bank is important to maintain regulatory compliance.
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