
Fill Your Details & Get Your Quote
Get Instant Support over whatsapp
8882742187
FDI is the abbreviation of Foreign Direct Investment. FDI can be defined as an investment made in business interest by a company or individual of one country in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.
The following is the key feature of foreign direct investment:
FDI is mostly made in open economies as & when compared to tightly regulated economies.
While making the foreign direct investment not only capital investment is required but also management, as well as technology, is also required.
According to the Organization for Economic Co-Operation and Development (OECD), an investment of 10% or above from overseas is considered as FDI.
As per our report, India has become the fastest growing investment region for foreign investors. In India, FDI is regulated under the Foreign Exchange Management Act, 2000 governed by Reserve Bank of India.
A company can make Foreign Direct Investment in India by two routes:
Government Route: Under the Government route the foreign investor should obtain the prior approval of the Government of India i.e. approval of :
Automatic Route: Under this route, the investor does not require any approval from the Reserve Bank of India or Government of India for the investment.
The Remitting Investors should ensure that (for FDI) –
The Company receiving the Investment should ensure that –
The routes under which foreign investment can be made is as under:
Tenor of convertible instruments will be guided by the instructions framed under the Companies Act, 2013 and the rules framed there under. However, the investee company should ensure that the price/ conversion formula of convertible capital instruments is determined upfront at the time of issue of the instruments. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations.
A convertible note is an instrument issued by a start-up company evidencing receipt of money initially as debt, which is repayable at the option of the holder, or which is convertible into such number of equity shares of such startup company, within a period not exceeding five years from the date of issue of the convertible note, upon occurrence of specified events as per the other terms and conditions agreed to and indicated in the instrument.
A person resident outside India (other than an individual who is a citizen of Pakistan or Bangladesh or an entity which is registered/ incorporated in Pakistan or Bangladesh), may purchase convertible notes issued by an Indian start-up company for an amount of twenty five lakh rupees or more in a single tranche. A start-up company engaged in a sector where foreign investment requires Government approval may issue convertible notes to a non-resident only with the approval of the Government. The amount of consideration should be received by inward remittance through banking channels or by debit to the NRE/ FCNR (B)/ Escrow account maintained by the person concerned.
Fully diluted basis means the total number of shares that would be outstanding if all possible sources of conversion are exercised.
No, FDI and FPI are agnostic from the point of view of the schedule under which investment has been made. It is the percentage which defines whether it is direct or portfolio investment.
One stop for all your legal solutions. Expert Lawyer offers the best services on time.Highly recommended.
One can expect the best legal advice & timely completion of the work.
Thankful to team Expert Lawyer. They are like your true friend, you ask for favour & they are always for you to provide you with the best.
Commitment, transparency, timely delivery, patience etc , are the words to describe the services of Expert Lawyer. They are simply the best.
When you think for corporate solutions ,you think for Expert Lawyer.
Ease of doing business = Expert Lawyer.
You name it,they provide it. Expert Lawyer provide the best services in the market.
You can trust Expert Lawyer for long venture. I have been associated with Expert Lawyer for quite sometime & they have never disappointed me .They have always fulfilled their commitment.
Regd Office: Dwarka Sector -30, New Delhi-110075 (DELHI)
Corporate Office: Shaheen Bagh, Kalindikunj Road, New Delhi-110025 (DELHI)
Get Instant Quotation over whatsapp
8882742187