The RBI has issued Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 on 17th October, 2019 which shall come into force on the same date in the context of new Foreign Exchange Management (Non-Debt Instrument) Rules, 2019.
The Regulations provides the mode for payment and remittance of sale proceeds for each Non-debt instruments issued in foreign exchange.
The Regulation also provides the reporting requirements for any Non – resident making investments in India. The requirements include filing forms including FC-GPR, FLA, FC-TRS, ESOP, DRR, LLP(I), LLP(II), LEC F(II), InVI & LEC(NRI).
A downstream investment qualifying as indirect foreign investment shall require notification with the Secretariat for Industrial Assistance, and Form DPIIT shall be filed within 30 days of such investment. The Indian start-up company issuing Convertible Notes to a person resident outside India is required to file Form CN within 30 days of such issue.
All reporting shall be made through or by an Authorized Dealer bank. Any delay shall invite late submission fee.
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