QUERY REGARDING FEMA

[Shalini Malhotra]

Can anyone revert on this transaction- Is this a valid transaction as per FEMA ?

If a Foreign National unable to transfer his Initial subscription amount from his own account to COMPANY'S current account and the other shareholder having OCI transfers funds on his behalf (foreign National ) from his NRE Account to company's account. 

On which all transaction the following provision is applicable -

There is a provision in RBI/FED/2015-16/13, FED Master Direction No.18/2015-16 updated on September 30, 2022 Part IV 1(b)(iv)

 

In case the Indian company issues equity instruments to a person resident outside India other than to the person resident outside India from who the inward remittance has been received, the form FC-GPR has to be filed along with the following documents:

(a) KYC reports of both the remitter and the beneficial owner.

(b) A no-objection certificate (NOC) from the remitter for issuing equity instruments to the beneficial owner mentioning their relationship.

(c) A letter from the beneficial owner explaining the reason for the remitter making remittance on its behalf.

(d) A copy of agreement / board resolution from the investee company for issuing equity instruments to a person other than from who the remittance has been received