Foreign money has its own rulebook
When you raise from non-resident investors, the transaction falls under FEMA and FDI policy. Getting the filings right keeps your cap table clean and avoids penalties later.
Key concepts
- Automatic route: most startup sectors allow 100% FDI without prior approval
- Approval route: some sensitive sectors need government approval
- Pricing guidelines: shares to non-residents must be issued at or above fair value
- FC-GPR: report the share allotment to the RBI within the prescribed time
Do the FC-GPR filing on time. A delayed report is a common, avoidable compliance headache during due diligence.
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