FEMA (TRANSFER OR ISSUE OF SECURITY BY A PERSON RESIDENT OUTSIDE INDIA) (FOURTH AMENDMENT) REGULATIONS, 2012 – AMENDMENT IN REGULATION 1 - 230/2012-RB - Foreign Exchange Management

FEMA (TRANSFER OR ISSUE OF SECURITY BY A PERSON RESIDENT OUTSIDE INDIA) (FOURTH AMENDMENT) REGULATIONS, 2012 - AMENDMENT IN REGULATION 1 NOTIFICATION NO. FEMA 230/2012-RB Dated 29-5-2012 GSR 797(E),- In exercise of the powers conferred by clause ( b ) of sub-section (3) of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) , the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 ( Notification No. FEMA20/2000-RB, dated 3rd May, 2000 ) namely:- Short Title Commencement 1. ( i ) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Fourth Amendment) Regulations, 2012. ( ii ) They shall be deemed to have come into force from the 27th day of February, 2009. Amendment of Regulation 1 2. In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 , ( Notification No. FEMA.20/2000-RB, dated 3rd May, 2000 ), ( i ) in Schedule 1, the sub-paragraph (2) of the paragraph 2 shall be substituted with the following namely: 1 [(2) A company which is reckoned as Micro and Small Enterprise (MSE) (earlier Small Scale Industrial Unit) in terms of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, including an Export Oriented Unit or a Unit in a Free Trade Zone or in an Export Processing Zone or in a Software Technology Park or in an Electronic Hardware Technology Park, and which is not engaged in any activity/sector mentioned in Annex A to this Schedule may issue shares or convertible debentures to a person referred to in paragraph 1, subject to the limits prescribed in Annex B to this Schedule, in accordance with the Entry Routes specified therein and the provision of the Foreign Direct Investment Policy, as notified by the Ministry of Commerce Industry, Government of India, from time to time.] ( ii ) in Schedule 1, the sub-paragraph (3) of the paragraph 2 shall be substituted with the following namely: (3) Any Industrial undertaking, with or without Foreign Direct Investment, which is not an MSE, having an industrial license under the provisions of the Industries (Development Regulation) Act, 1951 for manufacturing items reserved for manufacture in the MSE sector may issue shares to persons resident outside India referred to in paragraph 1, to the extent of 24 per cent of its paid-up capital. Issue of shares in excess of 24 per cent of paid-up capital shall require prior approval of the Foreign Investment Promotion Board of the Government of India and shall be in compliance with the terms and conditions of such approval. 2 [Explanation.-For the purposes of sub-paragraphs (2) and (3) above, in terms of the provisions of the Micro, Small and Medium Enterprises Development Act, (i) in the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951, a micro enterprise means where the investment in plant and machinery does not exceed twenty five lakh rupees; a small enterprise means where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees; (ii) in the case of the enterprises engaged in providing or rendering services, a micro enterprise means where the investment in equipment does not exceed ten lakh rupees; a small enterprise means where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees.] [No. FEMA 230/2012-RB] RUDRA NARAYAN KAR, Chief General Manger Foot Note:- (1) The Principal Regulations were published in the Official Gazette vide G.S.R. No. 406(E) dated May, 8 2000 in Part II, Section 3, Sub-section (i) and Subsequently amended as under:- GSR No. 158(E) dated 02.03.2001 GSR No. 175(E) dated 13.03.2001 GSR No. 182(E) dated 14.03.2001 GSR No. 4(E) dated 02.01.2002 GSR No. 574(E) dated 19.08.2002 GSR No. 223(E) dated 18.03.2003 GSR No. 225(E) dated 18.03.2003 GSR No. 558(E) dated 22.07.2003 GSR No. 835(E) dated 23.10.2003 GSR No. 899(E) dated 22.11.2003 GSR 12(E) dated 07.01.2004 GSR No. 278(E) dated 23.04.2004 GSR No. 454(E) dated 16.07.2004 GSR No. 625(E) dated 21.09.2004 GSR No. 799(E) dated 08.12.2004 GSR No. 201(E) dated 01.04.2005 GSR No. 202(E) dated 01.04.2005 GSR No. 504(E) dated 25.07.2005 GSR No. 505(E) dated 25.07.2005 GSR No. 513(E) dated 29.07.2005 GSR No. 738(E) dated 22.12.2005 GSR No. 29(E) dated 19.01.2006 GSR No. 413(E) dated 11.07.2006 GSR No. 712(E) dated 14.11.2007 GSR No. 713(E) dated 14.11.2007 GSR No. 737(E) dated 29.11.2007 GSR No. 575(E) dated 05.08.2008 GSR No. 896(E) dated 30.12.2008 GSR No. 851(E) dated 01.12.2009 GSR No. 341(E) dated 21.04.2010 GSR No. 606(E) dated 03.08.2012 (ii) It is clarified that no person will be adversely affected as a result of the retrospective effect being given to such regulations. These provisions have been notified by the Department of Industrial Policy Promotion, Ministry of Commerce Industry, Government of India, vide Notification No. S.O. 563(E) dated February 27, 2009, published in the Official Gazette of Government of India on February 27, 2009. _____________ Notes:- 1. Corrected vide corrigendum notification dated 10.09.2013 , before it was read as (2) A company which is reckoned as Micro and Small Enterprise (MSE) (earlier Small Scale Industrial Unit) in terms of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, including an Export Oriented Unit or a Unit in a Free Trade Zone or in an Export Processing Zone or in a Software Technology Park or in an Electronic Hardware Technology Park, and which is not engaged in any activity/sector mentioned in Annex A to this Schedule may issue shares or convertible debentures to a person referred to in paragraph 1, subject to the limits prescribed in Annex B to this Schedule, in accordance with the Entry Routes specified therein and the provision of the Foreign Direct Investment Policy, as notified by the Ministry of Commerce Industry, Government of India, from time to time. 2. Corrected vide corrigendum notification dated 10.09.2013 .