Loan from foreign director/shareholder

Friends

In an Indian company, 88% equity are held by foreign nationals. Out of 5 Directors, only one  is a Indian. The Non resident Directors/NR shareholders wish to give loan to the Indian company to meet its working capital requirements. How can this be done.

Will the lending be treated as ECB. But ECB cannot be used for working capital requirements. Then how can the funding be done? Is there any way except investment by way of shares/debentures.

Please shrae your valuable experiendes.

Regards,

Replies (2)

it is right as per fema you can not allowed to loan from foreign share holder for working capital, you have to follow ECb Guidelines

 

but you can take the loan in the form of debenture ,please check RBi circular for the same

 

You can recieve more share capital.

 

Anuj

femaquery @ gmail.com

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