FEMA COMPLIANCES FOR FOREIGN INVESTMENTS

On receipt of share application money:

Within 30 days of receipt of share application money/amount of consideration from the non-resident investor, the Indian company is required to report to the Foreign Exchange Department, Regional Office concerned of the Reserve Bank of India,under whose jurisdiction its Registered Office is located, the Advance Reporting Form, containing the following details :

• Name and address of the foreign investor/s;
• Date of receipt of funds and the Rupee equivalent;
• Name and address of the authorised dealer through whom the funds have been received;
• Details of the Government approval, if any; and
• KYC report on the non-resident investor from the overseas bank remitting the amount of consideration.

The Indian company has to ensure that the shares are issued within 180 days from the date of inward remittance which otherwise would result in the contravention / violation of the FEMA regulations.