RBI through its A.P. (DIR Series) Circular No. 45 dated 16 November 2011 notified the FEMA (Transfer of Issue of Security by a PersonResident outside India) Regulations, 2000.
In terms of the said regulations the transfer of equity shares / fully and mandatorily convertible debentures/ fully and mandatorily convertible preference shares (hereinafter referred to as ‘shares’) of
an Indian company, from a person resident outside India (non-resident) to a person resident in India (resident) or vice versa, has to be reported to an AD Bank within 60 days of transactions. Further, the
receipt of consideration for issue of shares as well as the issue of shares of an Indian company, to a non-resident has to be reported to RBI through an AD Bank within 30 days of the transaction.
Further it has decided, to treat the issue / transfer of ‘participating interest/ rights’ in oil fields to a non- resident as Foreign Direct Investment (FDI) transaction under the extant FDI policy and the FEMA regulations.
And these transactions have to be reported as FDI transactions interms of the provisions of Regulations 9 and 10 of the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended.
Accordingly, transfer of ‘participating interest/ rights’ will be reported as ‘other’ category under Para 7 of revised Form FC-TRS and issuance of ‘participating interest/ rights’ will be reported as ‘other’ category of instruments under Para 4 of Form FC-GPR.
In terms of the said regulations the transfer of equity shares / fully and mandatorily convertible debentures/ fully and mandatorily convertible preference shares (hereinafter referred to as ‘shares’) of
an Indian company, from a person resident outside India (non-resident) to a person resident in India (resident) or vice versa, has to be reported to an AD Bank within 60 days of transactions. Further, the
receipt of consideration for issue of shares as well as the issue of shares of an Indian company, to a non-resident has to be reported to RBI through an AD Bank within 30 days of the transaction.
Further it has decided, to treat the issue / transfer of ‘participating interest/ rights’ in oil fields to a non- resident as Foreign Direct Investment (FDI) transaction under the extant FDI policy and the FEMA regulations.
And these transactions have to be reported as FDI transactions interms of the provisions of Regulations 9 and 10 of the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended.
Accordingly, transfer of ‘participating interest/ rights’ will be reported as ‘other’ category under Para 7 of revised Form FC-TRS and issuance of ‘participating interest/ rights’ will be reported as ‘other’ category of instruments under Para 4 of Form FC-GPR.
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