Foreign Direct Investment (FDI) in India –definition of ‘group company’ - FEMA - 68

RBI/2013-14/356 A.P. (DIR Series) Circular No. 68 November 01, 2013 To All Category I Authorised Dealer banks Madam/Sir, Foreign Direct Investment (FDI) in India definition of group company Attention of Authorised Dealer Category I (AD Category-I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified by the Reserve Bank vide Notification No. FEMA. 20/2000-RB dated 3rd May 2000 , as amended from time to time. 2. The extant FDI policy has since been reviewed and it has been decided to incorporate the definition for group company as under; Group company means two or more enterprises which, directly or indirectly, are in position to: (i) exercise twenty-six per cent, or more of voting rights in other enterprise; or (ii) appoint more than fifty per cent, of members of board of directors in the other enterprise. 3. Copy of Press Note No. 2 (2013 Series) dated June 3, 2013 issued by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce Industry, Government of India in this regard is enclosed. 4. AD Category - I banks may bring the contents of the circular to the notice of their customers/constituents concerned. 5. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Sixteenth Amendment) Regulations, 2013 which have been notified vide Notification No. FEMA.292/2013-RB dated October 4, 2013, vide G.S.R. No. 683(E) dated October 11, 2013 . 6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999 ) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Rudra Narayan Kar) Chief General Manager-In-Charge