FOREIGN DIRECT INVESTMENT AND APPROVALS
Foreign investment in India is primarily governed by the consolidated FDI policy formulated by the Secretariat for Industrial Assistance (SIA) under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry, Government of India (DPIIT), the foreign investment Promotion Board (FIPB) and foreign exchange regulations framed and governed by the Reserve Bank of India.
Presently foreign investment in India is mainly managed through the following avenues:
No prior regulatory approval is required from either the RBI or FIPB under the automatic route. Investors are required to notify the concerned regional office of the RBI within 30 days of receiving investment money in India and to file the required documents and details of the shares allotted, with the same regional office, within 30 days of issuing such shares to the respective foreign investors.
FDI in business sectors not covered under the automatic route requires prior approval from the Government of India. Applications for foreign investments that need prior governmental approval are required to be submitted to the FIPB.
Foreign persons who can invest in India under the FDI regime
- A non-resident entity (other than a citizen of Pakistan or Bangladesh or an entity incorporated in Pakistan or Bangladesh) can invest in India subject to compliance with the extent FDI regulations.
- A person who is a citizen of Bangladesh or Pakistan or an entity incorporated in Bangladesh or Pakistan can invest in India under the FDI provisions, subject to receiving the prior approval of the FIPB.
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Under the Start-up India Action Plan, start-ups that meet the definition as prescribed under G.S.R. notification 127 (E) are eligible to apply for recognition under the program.
Eligibility Criteria for Start-up Recognition:
- The Start-up should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
- Turnover should be less than INR 100 Crores in any of the previous financial years
- An entity shall be considered as a start-up up to 10 years from the date of its incorporation
- The Start-up should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Start-up”
The Start-ups have to provide support documents, at the time of application.
Start-ups in India looking for the right financial guidance and assistance are welcome to contact us. We provide you with all the necessary information needed to start-up your business such as deciding the simplest tax structure, book-keeping and payroll maintenance etc.
Team BNW with their financial knowledge and analytics will help you create smart decisions with relatively lower risks. With Team BNW start-up businesses won’t have to worry about Company matters, accounts, tax returns, tax planning, and financial matters.
For more details, please contact Team BNW