Can an Indian company issue shares to NRI?

Foreign Institutional Investors (FIIs) registered with SEBI and Non-resident Indians (NRIs) are eligible to purchase shares and convertible debentures issued by Indian companies under the Portfolio Investment Scheme (PIS).

How do foreign investors issue shares?

1. Convene a Board Meeting to Consider the following matters: To issue and approve the issue of shares. To approve the draft letter of offer in Form PAS-4….Type of Security Issues:

1. Whether the nature of the security is Equity, Debentures, Others (Specify)
2. Number.
3. Face Value.
4. Premium.
5. Issue Price/Share.
6. Amount of Inflow.

How do you transfer shares from non resident to resident?

Thus, following steps are followed for successful registration of transfer of securities from Resident to Non-Resident:

1. Receipt of consideration from non-resident.
2. Obtain FIRC (Foreign Inward Remittance certificate) and KYC (Know your customer) of person residing outside India from AD Category-I bank.

Can redeemable preference shares be issued to non residents?

With a view to rationalise and simplify the procedures, the RBI has permitted Indian companies to issue non-convertible or redeemable preference shares or debentures as a bonus to the non-resident equity shareholders including the depositories that act as trustees for the ADR or the GDR holders.

Can shares be issued to NRI?

Yes, the Indian companies are allowed to freely issue the rights/bonus shares to existing NRI shareholders. The issuing company needs to ensure that the issuance of such rights/bonus shares is within the sectoral cap limit allowed for NRI.

Can an Indian company invest in a foreign company?

An Indian company can make overseas investment in any activity (except those that are specifically prohibited) in which it has experience and expertise.

Is valuation required for transfer of shares?

Any transfer of unquoted (unlisted) shares shall be subject to determination of Fair market value calculated in accordance with the method (formula) as prescribed in the above-mentioned rule which shall not be less than book value of shares which has to be certified by a Category-I Merchant banker or Chartered …

What are the conditions of redemption of preference shares?

1) The shares to be redeemed must be fully paid up; 2) Redemption can be effected only out of profits which would otherwise have been available for dividend, or out of the proceeds of a fresh issue of shares made for the purpose of redemption; 3) The premium payable, if any, on the redemption shall be provided for out …

What happens if preference shares are not redeemed?

The shareholders of redeemable preference shares of the company do not become creditors of the company in case their shares are not redeemed by the company at the appropriate time. They continue to be shareholders, no doubt subject to certain preferential rights.”

Do NRI pay tax on stocks?

Listed equity shares and equity-oriented mutual fund units sold by an NRI investor before 12 months of its acquisition are called short-term capital assets the profit is classified as short-term capital gains. STCG on shares for NRI shall be taxable at 15%. STT should be paid on such transactions.

When to issue shares for consideration other than cash?

( d) other purposes. Where shares are being issued in lieu of acquisition of assets of other company, it should be ensured that the transferor company has passed appropriate ordinary resolution in general meeting under section 293 (1) ( a) of the Companies Act, 1956.

Is there tax implication in issue of right shares?

6 Similarly, there will be no tax implication in case of issue of right shares or bonus shares in case where company is an unlisted company because, as per Rule 11UA (Net asset value/No. of shares issued) is taken as the FMV of shares.

Can a company issue shares at par or at premium?

A company may issue these shares at par or at a premium. The company calculates the number of shares on the basis of the amount payable to the vendor. Thus, It can also issue shares to the promoters or the lawyers for rendering services in the formation of the company.

How are shares of a company taxed in India?

Therefore, in a situation where a listed company decides to issue right shares to existing shareholders at discount, say Rs. 300, lower than the Market price, say Rs. 350 then, difference between the issue price and Market price on the date of receipt of those shares will be taxable in the hands of assessee.