Dear friends,
Please find below A. P. (DIR SERIES 2012-13) CIRCULAR NO. 16, DATED 22-8-2012 ON FOREIGN DIRECT INVESTMENT BY CITIZEN/ENTITY INCORPORATED IN PAKISTAN.
1. Attention of Authorised Dealer (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 vide Notification No. FEMA 20/2000-RB, dated May 3, 2000 (hereinafter referred to as Notification No. FEMA 20), and as amended from time to time.
2. In terms of sub-regulation (1) of Regulation 5 of the Notification ibid, a person resident outside India who is a citizen of Pakistan or an entity incorporated outside India in Pakistan, is not allowed to purchase shares or convertible debentures of an Indian company under Foreign Direct Investment Scheme.
3. It has now been decided that notwithstanding anything contained in sub-regulation (1) of Regulation 5 of the Notification No.FEMA. 20,a person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board of the Government of India, purchase shares and convertible debentures of an Indian company under Foreign Direct Investment Scheme, subject to the terms and conditions specified in Schedule 1 of the Notification, ibid, provided further that notwithstanding anything contained in Schedule I of the Notification, ibid, the Indian company, receiving such foreign direct investment, is not engaged or shall not engage in sectors/activities pertaining to defence, space and atomic energy and sectors/activities prohibited for foreign investment.
4. AD Category - I banks may bring the contents of the circular to the notice of their customers and constituents concerned.
5. 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.
Please find below A. P. (DIR SERIES 2012-13) CIRCULAR NO. 16, DATED 22-8-2012 ON FOREIGN DIRECT INVESTMENT BY CITIZEN/ENTITY INCORPORATED IN PAKISTAN.
1. Attention of Authorised Dealer (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 vide Notification No. FEMA 20/2000-RB, dated May 3, 2000 (hereinafter referred to as Notification No. FEMA 20), and as amended from time to time.
2. In terms of sub-regulation (1) of Regulation 5 of the Notification ibid, a person resident outside India who is a citizen of Pakistan or an entity incorporated outside India in Pakistan, is not allowed to purchase shares or convertible debentures of an Indian company under Foreign Direct Investment Scheme.
3. It has now been decided that notwithstanding anything contained in sub-regulation (1) of Regulation 5 of the Notification No.FEMA. 20,a person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board of the Government of India, purchase shares and convertible debentures of an Indian company under Foreign Direct Investment Scheme, subject to the terms and conditions specified in Schedule 1 of the Notification, ibid, provided further that notwithstanding anything contained in Schedule I of the Notification, ibid, the Indian company, receiving such foreign direct investment, is not engaged or shall not engage in sectors/activities pertaining to defence, space and atomic energy and sectors/activities prohibited for foreign investment.
4. AD Category - I banks may bring the contents of the circular to the notice of their customers and constituents concerned.
5. 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.
Press release dated 1 Aug 2012
FDI:PERMITTING INVESTMENTS FROM PAKISTAN (PN No.. 3 (2012 SERIES), DATED 1-8-2012).
As per paragraph 3.1.1 of 'Circular 1 of 2012 - Consolidated FDI Policy', effective from 10-4-2012, investment from a citizen of Pakistan or an entity incorporated in Pakistan is not permitted .
The Government of India has reviewed the policy, as contained in paragraph 3.1.1 of the circular ibid and decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India, under the Government route, in sectors/activities other than defence, space and atomic energy
Accordingly, Paragraph 3.1.1 of 'Circular 1 of 2012 - Consolidated FDI Policy', effective from 10-4-2012, is amended to read as below:
"3.1.1 A non-resident entity can invest in India, subject to the FDI Policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. A citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space and atomic energy."
The above decision will take immediate effect.
(PRESS NOTE NO. 3 (2012 SERIES), DATED 1-8-2012)
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