Transfer of shares by nri
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 July 2013
An NRI wants to transfer his shares to a resident Indian by way of gift.Can he do So? If yes what is the procedure under FEMA and ROC.
18 July 2013
Hi
Yes, you can do so read Master Circular on FDI issued by RBI on July 01, 2013, it will help you.
Yes, you can do so read Master Circular on FDI issued by RBI on July 01, 2013, it will help you.
18 July 2013
Transfer of shares by a Person resident outside India
a. Non Resident to Non-Resident (Sale / Gift): A person resident outside India (other than NRI and OCB) may transfer by way of sale or gift, shares or convertible
12
debentures to any person resident outside India (including NRIs but excluding OCBs).
Note: Transfer of shares from or by erstwhile OCBs would require prior approval of the Reserve Bank of India.
b. NRI to NRI (Sale / Gift): NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI.
a. Non Resident to Non-Resident (Sale / Gift): A person resident outside India (other than NRI and OCB) may transfer by way of sale or gift, shares or convertible
12
debentures to any person resident outside India (including NRIs but excluding OCBs).
Note: Transfer of shares from or by erstwhile OCBs would require prior approval of the Reserve Bank of India.
b. NRI to NRI (Sale / Gift): NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI.
18 July 2013
Non Resident to Resident(Sale / Gift):
(i) Gift: A person resident outside India can transfer any security to a person resident in India by way of gift.
(ii) Sale under private arrangement: General permission is also available for transfer of shares / convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India in case where transfer of shares are under SEBI regulations and where the FEMA pricing guidelines are not met, subject to the following
(a) The original and resultant investment comply with the extant FDI policy/ FEMA regulations;
(b) The pricing complies with the relevant SEBI regulations (such as IPO, Book building, block deals, delisting, exit, open offer/ substantial acquisition / SEBI (SAST) and buy back); and
(c) CA certificate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the AD bank.
(d) Compliance with reporting and other guidelines as given in Annex 3.
Note: Transfer of shares from a Non Resident to Resident other than under SEBI regulations and where the FEMA pricing guidelines are not met would require the prior approval of the Reserve Bank of India.
Non Resident to Resident(Sale / Gift):
(i) Gift: A person resident outside India can transfer any security to a person resident in India by way of gift.
(ii) Sale under private arrangement: General permission is also available for transfer of shares / convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India in case where transfer of shares are under SEBI regulations and where the FEMA pricing guidelines are not met, subject to the following
(a) The original and resultant investment comply with the extant FDI policy/ FEMA regulations;
(b) The pricing complies with the relevant SEBI regulations (such as IPO, Book building, block deals, delisting, exit, open offer/ substantial acquisition / SEBI (SAST) and buy back); and
(c) CA certificate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the AD bank.
(d) Compliance with reporting and other guidelines as given in Annex 3.
Note: Transfer of shares from a Non Resident to Resident other than under SEBI regulations and where the FEMA pricing guidelines are not met would require the prior approval of the Reserve Bank of India.
18 July 2013
A person resident in India, who intends to transfer any security, by way of gift to a person resident outside India, has to obtain prior approval from the Reserve Bank. While forwarding the application to the Reserve Bank for approval for transfer of shares by way of gift, the documents mentioned in Annex - 4 should be enclosed. The Reserve Bank considers the following factors while processing such applications:
a) The proposed transferee is eligible to hold such security under Schedules 1, 4 and 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time.
b) The gift does not exceed 5 per cent of the paid-up capital of the Indian company / each series of debentures / each mutual fund scheme.
c) The applicable sectoral cap limit in the Indian company is not breached.
d) The transferor (donor) and the proposed transferee (donee) are close relatives as defined in Section 6 of the Companies Act, 1956, as amended from time to time. The current list is reproduced in Annex - 5.
e) The value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 50,000 per financial year.
f) Such other conditions as stipulated by the Reserve Bank in public interest from time to time.
A person resident in India, who intends to transfer any security, by way of gift to a person resident outside India, has to obtain prior approval from the Reserve Bank. While forwarding the application to the Reserve Bank for approval for transfer of shares by way of gift, the documents mentioned in Annex - 4 should be enclosed. The Reserve Bank considers the following factors while processing such applications:
a) The proposed transferee is eligible to hold such security under Schedules 1, 4 and 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time.
b) The gift does not exceed 5 per cent of the paid-up capital of the Indian company / each series of debentures / each mutual fund scheme.
c) The applicable sectoral cap limit in the Indian company is not breached.
d) The transferor (donor) and the proposed transferee (donee) are close relatives as defined in Section 6 of the Companies Act, 1956, as amended from time to time. The current list is reproduced in Annex - 5.
e) The value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 50,000 per financial year.
f) Such other conditions as stipulated by the Reserve Bank in public interest from time to time.
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