Monday 30 April 2012

FDI – Permissible Capital Instruments for Investing in India under FEMA


Under the existing FDI policy, the following Capital  Instruments for permissible for Investing in India under FEMA

·         Equity Shares
·         Fully, Compulsorily  and Mandatorily Convertible Preference Shares
·         Fully, Compulsorily  and Mandatorily Convertible Debentures
·         FCCB’s
·         Subscription to American / Global Depository Receipts of an Indian Company

Interest on Other type of Preference Shares/Debentures, would be denominated in Rupees and hence interest thereon has to be based on swap equivalent of LIBOR + permissible spread for corresponding maturity External Commercial Borrowings.

The Law is based on Consolidated FDI Policy Circular No.1 of 2012. Prepared by Mr. Arinjay Kumar Jain






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iEdubook is all about educating people, whether students, professionals, or individuals. be it in school studies, in Finance matters for life, your taxation, and everything else. Our repository, and growing user base at iEdubook.com is a testimony to this fact. This blog is contributed by Mr. Arinjay Kumar Jain, who is an Indian Chartered Accountant by profession, with more than 10 years of experience in Tax, Mergers & Acquisiton, Private equity investment structuring and other matters with firms like KPMG India and RSM.

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