FDI in India

APPROVAL PROCESS FOR FDI IN INDIA

The proposals for FDI in India are processed according to the standard operating procedure (SOP) devised by the Department for the promotion of Industry and internal trade (DPIIT).

Following are the stages which are there in FDI approval process:

  • APPLICATION SUBMISSION: Preliminary stage to initiate a process of FDI in India is to submit the application in the prescribed format, which requires prior approval from several ministries via single window i.e. Foreign Investment Facilitation Portal (FIFP) working under the ambit of Department for promotion of industry and internal trade (DPIIT).
  • UPLOADING DOCUMENTS: There are certain other documents which need to be attested with the application form for FDI approval on the FIFP portal. These documents will help in verifying the application of the applicant.
  • ASSIGNING OF CASES: Within 2 working days, DPIIT will assign the cases.
    • In the case where the documents are digitally signed by the applicant, then physical submission of the same is not required.
    • In the case where the documents are not digitally signed, then the physical copy of the proposal is to be submitted to the Competent Authority within 5 days of such intimation.
  • CIRCULATION OF PROPOSAL TO VARIOUS DEPARTMENT: Since FDI in India is regulated under FEMA regulations, therefore, it is necessary to circulate a copy of the same to RBI to consider it in that perspective. Some additional departments such as External Affairs, revenue, and finance are also equally important, so the proposal must be shared with these departments as well.
  • SCRUTNIZAITON: Proposals are scrutinized within a week time and additional information must be served to department if required.
  • FINAL APPROVAL/REJECTION: On getting all required information, the Competent Authority is required to give out its decision in next two weeks. Approval/rejection letters are sent online to the applicant, consulted Ministries/Departments and DIPP.
    {Note: Where total foreign equity inflow is more than INR 5000 crore, then it is required to place the same in front of Cabinet Committee on Economic Affairs (CCEA).

Read Other blogs: DIR-3 (KYC)

HOW WILL CAONWEB WILL HELP YOU?

When it is about managing funds which is brought in by the way of FDI then CAONWEB is the right choice you can opt for. Since bringing in funds by the mode of FDI in India is the most challenging part which every business planning to expand at an international level goes through. This is when CAONWEB comes into play. We at CAONWEB have the most experienced Chartered accountants & Company secretary who will look into all your FDI related queries.

Our FDI consulting services are immensely beneficial for setting up business in any sector which falls under the ambit of FDI. Broad category of FDI services we offer:

  1. Advisory for business expansion.
  2. Consultancy on FDI compliance.
  3. All round support for the type of venture one is planning to establish. For example: Joint venture, partnership company, private company
comapny name

How can a Non Resident or a foreigner establish company in India?

Foreign investment in India is a major monetary source for economic development in India. Apart from being a major source of economic growth, foreign investment in India is a major source of non-debt financial resource for the economic development of India. Foreign investment in India is made by foreign companies so that they can take advantage of relatively lower wages, special investment privileges such as tax exemptions, etc. For a country in which foreign investments are being made, it also means achieving technical know-how and generating employment.

Do you know that being a non-resident person or a foreigner you can easily incorporate your own new company in India? The process of online company registration in India and making foreign investment in India is quite simpler than you can imagine. The first step for company incorporation is to hire FDI consultants preferably a Chartered Accountant or Company Secretary, who will make the whole process smooth and effective. You can easily find FDI Consultants through our online directory of CAONWEB.

Company Registration

Online Company Registration in India:

The private limited company is governed by the Companies Act, 2013 in India. As per the Companies Act, 2013 the minimum number of directors requirement is 2 for private limited company incorporation. One of the director must be an Indian resident. Therefore, a foreigner can also become the director of a private limited company.

The documents required to become a director for Non Resident or foreigner are:

  1. Digital Signature Certificate (DSC)
  2. Director Identification Number (DIN)
  3. Passport
GST Registration

To apply for DIN, requirements are:

  • Photograph;
  • Proof of identity;
  • Proof of residence;
  • Verification of the applicant for applying for allotment of DIN in Form DIR-4; and
  • Specimen signature duly verified.

In the process of application of DIN, all documents including photographs must be certified by the Indian Embassy or a notary in the home country of the applicant or by the Managing Director or by the CEO or by the Company Secretary of the company registered in India, in which applicant is a director. If a foreign director is having a valid multiple entry Indian VISA or Person of Indian Origin card or Overseas Citizen of India card, then the attestation can also be done by Public Notary or Gazetted Officer in India or a practicing chartered accountant or company secretary or cost accountant. For any other queries relating to foreign investment in India, online company registration in India, you can take help FDI consultants through our online platform of CAONWEB.

FDI

FDI Allowances in various sectors

  • Agriculture – 100%
  • Plantation Sector – 100%
  • Mining of metal and non-metal ores – 100%
  • Mining – Coal & Lignite – 100%
  • Food Product Retail Trading – 100%
  • Broadcasting Carriage Services (Teleports, DTH, Cable Networks, Mobile TV, HITS) – 100%
  • Broadcasting Content Service – Up-linking of Non-‘News & Current Affairs’ TV Channels/ Downlinking of TV Channels – 100%
  • Airports – Greenfield – 100%
  • Airports – Brownfield – 100%
  • Air Transport Service – Non-Scheduled – 100%
  • Air Transport Service – Helicopter Services/ Seaplane Services – 100%
  • Ground Handling Services – 100%
  • Maintenance and Repair organizations; flying training institutes; and technical training institutions – 100%
  • Construction Development – 100%
  • Industrial Parks – new and existing – 100%
  • Trading – Wholesale – 100%
  • Trading – B2B E-commerce – 100%
  • Duty-Free Shops – 100%
  • Railway Infrastructure – 100%
  • Asset Reconstruction Companies – 100%
  • Credit Information Companies – 100%
  • White Label ATM Operations – 100%
  • Non-Banking Finance Companies – 100%
  • Pharma – Greenfield – 100%
  • Petroleum & Natural Gas – Exploration activities of oil and natural gas fields – 100%
  • Petroleum refining by PSUs – 49%
  • Infrastructure Company in the Securities Market – 49%
  • Commodity Exchanges – 49%
  • Insurance – 49%
  • Pension – 49%
  • Power Exchanges – 49%
FDI Services

FDI Services

India is one of the top Country in terms of foreign investment destination. To invite and encourage Foreign Direct Investment in India (FDI), the process of regulation and approval has been substantially liberalized. The Reserve Bank of India has prescribed the administrative and compliance aspects of FDI.

FDI can be divided into two broad categories – Investment under automatic route and investment through prior approval of Government.

A procedure under automatic route:

FDI in sectors/activities to the extent permitted under automatic route does not require any prior approval either by the Government or RBI. The investors are only required to notify the Regional office concerned of RBI within 30 days of receipt of inward remittances and file the required documents with that office within 30 days of issue of shares to foreign investors.

Procedure for Government approval:

FDI in activities not covered under the automatic route requires prior Government approval and are considered by the Foreign Investment Promotion Board (FIPB). Approvals of composite proposals involving foreign investment/foreign technical collaboration are also granted on the recommendations of the FIPB. For detail of project under Automatic Route and Government Route.