Entry routes for investments in India
A. Foreign Direct Investment (FDI
in Limited Company
B. Foreign Direct Investment (FDI
in Limited Liability Partnership (LLP)
Foreign Direct Investment is freely permitted in
almost all sectors. Under the Foreign Direct Investments (FDI) Scheme,
investments can be made by non-residents in the shares / convertible debentures
/ preference shares1 of an Indian company, through two routes:
1. Automatic
Route
Under the Automatic Route, the
foreign investor or the Indian company does not require any approval from the
Reserve Bank or Government of India for the investment
2. Government
Route
Under the Government Route, prior
approval of the Government of India, Ministry of Finance, Foreign Investment
Promotion Board (FIPB) is required.
An Indian company may receive Foreign
Direct Investment (FDI) under the following routes:
1. Automatic Route
FDI is permitted under automatic route
up to 100 per cent subject to sectorial caps as stipulated in the Consolidated FDI
Policy of India.
FDI in sectors /activities to the
extent permitted under the automatic route does not require any prior
approval either of the Government or the Reserve Bank of India.
2.
Government
Route
FDI in activities not covered under the
automatic route requires prior approval of the Foreign Investment Promotion
Board (FIPB).
An Indian company having FDIapproval
through FIPB route do not require any further clearance from the Reserve Bank
of India for receiving inward remittance and for the issue of shares to the
non-resident investors.
(Pioneers of online incorporation in
India)
©CompaniesInn.com LLP
