Tuesday, September 20, 2011

Whether investment in new companies in abroad can be made by Indian resident under Liberalised Remittance Scheme?

RBI master circular does not prohibit to invest in the shares of new companies.

Under the scheme, resident individuals can acquire and hold immovable property or shares (listed or otherwise) or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. The word otherwise can be interpreted as any other non-listed , new company etc,

Further , the RBI circular notifies the investment in shares as

Indian investment abroad in equity capital (shares)

It does not specifically state not in the shares of new companies in abroad

Hence , according to me , there is no bar in investing in new company shares in abroad under LRS Scheme up to $ 75000 per FY.

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