9A.8
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Acquisition of Shares and issue of Holding Licence
Where equity contributions are made by way of cash remittance or capitalisation of exports, royalty, technical know-how fees, etc., Indian promoter companies are required to receive share certificates of equivalent value from the overseas JV/WOS within three months from the date of effecting such cash remittance or the date on which the royalty, fees, etc. become due for payment. As soon as shares are acquired from the overseas concern, Indian companies should apply in form FAD 2 to the concerned Regional Office of Reserve Bank for obtaining necessary licence to hold such foreign securities as required under Section 19(1)(e) of FERA, 1973. In case of bonus shares issued by the overseas JV/WOS, the Indian promoter company while applying for holding licence in form FAD 2 should also submit certified copies of the Board resolution of the overseas concern approving and allotting the bonus shares. They should also file an Annual Return of Foreign Currency Shares held in JV/WOS abroad in form FAD 3 as at the end of every calendar year.