New FDI Policy
1.
The
Department of Industrial Policy and Promotion recently released the
consolidated FDI Policy vide circular no. D/o IPP F. No.
5(1)/2017-FC-1
dated August 28, 2017 (“New FDI Policy”).
Under the New FDI Policy:
The
Department of Industrial Policy and Promotion recently released the
consolidated FDI Policy vide circular no. D/o IPP F. No.
5(1)/2017-FC-1
dated August 28, 2017 (“New FDI Policy”).
Under the New FDI Policy:
i. Conversion
of a LLP having foreign investment into a company and vice versa, is allowed
under automatic route, where there are no FDI linked conditions;
of a LLP having foreign investment into a company and vice versa, is allowed
under automatic route, where there are no FDI linked conditions;
ii.
Start-ups
have been recognized under the New FDI Policy and have been allowed to issue
equity shares, equity linked instruments or debt instruments to FVCI. Conditions
for issue of convertible notes[1] by
start-ups to a person resident outside India have also been prescribed;
Start-ups
have been recognized under the New FDI Policy and have been allowed to issue
equity shares, equity linked instruments or debt instruments to FVCI. Conditions
for issue of convertible notes[1] by
start-ups to a person resident outside India have also been prescribed;
iii. The
proposals requiring government approval will be dealt by the competent
authority which has been defined under the New FDI Policy to mean the concerned
administrative ministry/department empowered to grant government approval for
foreign investment under the extant FDI Policy and FEMA Regulations;
proposals requiring government approval will be dealt by the competent
authority which has been defined under the New FDI Policy to mean the concerned
administrative ministry/department empowered to grant government approval for
foreign investment under the extant FDI Policy and FEMA Regulations;
iv. The
approval of Reserve Bank of India shall not be required for establishment of
branch office, liaison office or project office or any other place of business
in India if the applicant is engaged in the business of telecom, defence,
private security or information and broadcasting and the applicant has been
granted a license/permission by the concerned ministry/regulator.
approval of Reserve Bank of India shall not be required for establishment of
branch office, liaison office or project office or any other place of business
in India if the applicant is engaged in the business of telecom, defence,
private security or information and broadcasting and the applicant has been
granted a license/permission by the concerned ministry/regulator.
[1]
Convertible notes have
been defined to mean an instrument, issued by a start-up against receipt of
money repayable at the option of the holder, convertible into equity shares
within a period not exceeding 5 years.
Convertible notes have
been defined to mean an instrument, issued by a start-up against receipt of
money repayable at the option of the holder, convertible into equity shares
within a period not exceeding 5 years.
