Subscription amount- Foreign Shareholder

[CS Leena Ambwani]

Dear All,

In case where company is incorporated with one of the Foreign shareholder, subscription amount is to be directly credited in the company's Current Account or requires Escrow Account? through NRE Account or through NRO Account? Shareholder is a NRI. Please advise. 

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Thanks & Regards

CS Leena Ambwani

[Prem Tripathi]

1. Amount to be transferred to Company’s Current Account

2. Payment can be made by the NRI from NRE or NRO account. 

If payment made from his NRE account, it would be considered as FDI and FEMA Compliance of the same like FCGPR etc will have to be ensured.

However, if the payment is made from his NRO Account, it will NOT be considered as FDI as the investment will be considered as on non-repatriable basis. Hence, no FEMA Compliance required.

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[CS Leena Ambwani]

Sir, Appreciate your quick response. Commendable reply that solved my queries. 

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Thanks & Regards

CS Leena Ambwani

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