12.7
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Acquisition of Foreign Currency Shares
Persons who are permanently resident in India are not normally allowed to make remittances from India to foreign countries for acquisition of foreign securities. However, Reserve Bank may consider applications from employees of Indian offices/branches of foreign companies as also joint ventures/subsidiaries in India in which foreign equity holding is 51 per cent and above for remittance towards acquisition of foreign currency equity shares of the foreign companies offered at concessive rates below the market price, provided the remittances do not exceed U.S.$ 10,000/- or its equivalent per employee, in a block of five years including acquisition of shares on rights basis, if any. The application for this purpose may be made to the Reserve Bank with relevant details such as, total number and face value of foreign currency shares to be allotted and the concessive rate offered for the shares vis-a-vis the prevailing market price, together with certified copies of the foreign companys latest audited balance sheet and resolution passed by its Board of Directors or any other document/s in support of the offer of shares to at concessive rate. Furthermore, acquisition of shares of the foreign company by the employees of their Indian branches/offices/wholly-owned subsidiaries in lieu of bonus payment will be allowed without any ceiling. For this purpose, the applicants should approach Reserve Bank for necessary permission with relevant documents.