Foreign Direct Investment is investments that an investor from any foreign country puts in a company of a country for mutual benefits of both the organizations. FDI India is very beneficial for its economy as it has many advantages that could take the country and the people towards progress.
To get FDI in India, you must know the process by which you can get it. There are two routes by which you can get FDI and these routes are:
- Automatic Route: In automatic route, FDI does not need a clearance from the Government or Reserve Bank of India. All the sectors where FDI is allowed up to 100%, falls into this category and the Government of India has no role to play here. Only the regional office of RBI need to be notified and submitted with all the required documents within 30 days of investing and shareholding.
- Government Route: This route is under the authority of the Government of India. The sectors that does not come under automatic routes, would come under the Government route. Foreign Investment Promotion Board (FIPB) approves the FDI if it shall proceed or not. FC-IL application can be made or even plain papers with all the legal and required information are accepted. This requires no fee. No further clearance from RBI is required, only their regional office should be submitted with receipt of inward remittances within the 30 days of issuance of shareholding.
After the investment is made by either of the two stages, there are two more procedures that needs to be followed. These are:
On receipt of money for investment: After the receipt of money from the investor, the regional office should be reported by the Indian company and that report should have the necessary details like name and address of the foreign investor, funds provided and other such things.
On issue of shares to the foreign investors: A report in form of FC-GPR should be filed with the Regional office of RBI within 30 days from the date of issues of shares. The report should have the following details:
- Certificate from the Company Secretary of the company accepting investment from person resident outside India certifying that:
- All the requirements of the Companies Act, 1956 have been complied with;
- Terms and conditions of the Government approval, if any, have been complied with;
- The company is eligible to issue shares under these Regulations; and
- The company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration;
- Certificate from Statutory Auditors or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the person resident outside India.
Are you looking for FDI in India? FDI India is here to guide you and make all the procedures of FDI smooth for you. We are a contact point for our clients and investors and are committed to deliver a professional experience to both the sides. We also provide you a proper strategy on how to proceed further and thus in a run to become the best FDI facilitators in India.