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What is the procedure to be followed after investment is made under the Automatic Route or with Government approval?

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posted Aug 3 by Abu Anam

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1 Answer

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A two-stage reporting procedure has to be followed:

1. On receipt of share application money:
- The Indian Company is required to report to the Foreign Exchange Department, Regional Office concerned of the RBI, under whose
- jurisdiction its RO is located, within 30 days of receipt of share application money.
- Reporting needs to be done in Advance Reporting Form which should contain the following details:
- Name and address of the foreign investors
- Date of receipt of funds and the rupee equivalent
- Name and address of the Authorised Dealer, which shall receive the funds
- Details of Government Approval, if any
- KYC report on the Non-Resident Investor from the overseas bank remitting the amount of consideration
- The shares need to be issued within 180 days from the date of inward remittance so as to not violate existing FEMA regulations.
2. Upon issue of shares to Non-Resident Investors:
- A report in form FC-GPR – Part A, needs to be filed with Foreign Exchange Department, Regional Office concerned of the RBI, within 30 days from the date of issue of shares.
- Following documents should be filed along with FC-GPR – Part A;
Certificate from the CS of the Company accepting investment, certifying that the Company has complied with the procedure for issue as laid down under the FDI scheme as indicated in the Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time.
- Document certifying the compliance of all the conditions laid down for investments under the Automatic Route and Approval Route where approval is required.
- Certificate from Statutory Auditors/ SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.

answer Aug 5 by Tanmay
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