Thursday, April 12, 2012

RBI LIBERALISES OVERSEAS INVEST- MENTS BY RESIDENT INDIVIDUALS

Henceforth, remittance shall be allowed from resident individuals for acquiring the qualification
shares for holding the post of a Director in the overseas company to the extent prescribed as per
the law of the host country where the company is located. The limit of remittance for acquiring such
qualification shares shall be within the overall ceiling prescribed for the resident individuals under
the Liberalized Remittance Scheme (LRS) in force at the time of acquisition.


  • Acquiring shares of a foreign company towards professional services rendered or in lieu of Director's remuneration It has been decided to grant General Permission to the resident individuals to acquire shares of a foreign entity in part /full consideration of professional services rendered to the foreign company or in lieu of Director's remuneration. The limit of  acquiring such shares in terms of value shall be within the overall ceiling prescribed for the resident individuals under the Liberalized Remittance Scheme (LRS) in force at the time of acquisition.
  • Acquiring shares in a foreign company through ESOP Scheme

It has now been decided that resident employees or Directors may be permitted to accept shares offered under an Employee Stock Option Plan (ESOP) Scheme globally, on uniform basis, in a foreign company irrespective of the percentage of the direct or indirect equity stake in the Indian company subject to:

The shares under the Employee Stock Option Plan (ESOP) Scheme are offered  by the issuing company globally on a uniform basis, and

An Annual Return is submitted by the 
Indian company to the Reserve Bank of 
India (RBI) through the AD Category - I 
bank giving details of remittances / 
beneficiaries, etc.

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