For sale of shares from Resident seller to Non resident buyer, Non resident buyer will have to sign and file Form FC - TRS with Authorised Dealer as per RBI circular RBI/2004-05/207 dated October 4, 2004.
Authorised Dealer will issue a certificate specifying that the remittance and the transaction is in accordance with FEMA regulations & RBI Guidelines.
Following are the attachments to form FC TRS:
1.Consent Letter duly signed by the seller and buyer or their duly appointed agent indicating the details of transfer i.e. number of shares to be transferred, the name of the investee company whose shares are being transferred and the price at which shares are being transferred. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record.
2. Where Consent Letter has been signed by their duly appointed agent, the Power of Attorney Document executed by the seller/buyer authorizing the agent to purchase/sell shares.
3. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India showing equity participation of residents and non-residents category-wise (i.e. NRIs/OCBs/foreign nationals/incorporated non-resident entities/FIIs) and its percentage of paid up capital obtained by the seller/buyer or their duly appointed agent from the company, where the sectoral cap/limits have been prescribed.
4. Certificate indicating fair value of shares from a Chartered Accountant. (the sale consideration shall not be less than the fair value of the shares)
5. Undertaking from the buyer to the effect that he is eligible to acquire shares/convertible debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with.
6. Undertaking from the FII/sub account to the effect that the individual FII/Sub account ceiling as prescribed by SEBI has not been breached.
The reader can refer to RBI circular No. RBI/2009-10/445 dated 4 May, 2010 for understanding revised pricing guidelines.
For any clarification or assistance , please feel free to contact me through rvsekar2007@gmail .com or 919848915177.