Yes, Company registered in India must have at least one Indian resident individual as a director.

Yes you can disallow. It is not mandatory to make the director as a shareholder in Indian Company.

Please have a look at list of documents above in "List of Documents Required" section.

The US company must complete all the necessary administrative and legal requirements, such as applying for name availability, preparing the memorandum and articles of association, and tax and labor registrations, and after registration, the subsidiary can start its business operations.

The routes under which foreign investment can be made is as under:

• Automatic Route: Foreign Investment is allowed under the automatic route without prior approval of the Government or the Reserve Bank of India, in all activities/ sectors as specified in the Regulation 16 of FEMA 20 (R).
• Government Route: Foreign investment in activities not covered under the automatic route requires prior approval of the Government.

‘Capital Instruments’ means equity shares, debentures, preference shares and share warrants issued by the Indian company.

• Equity shares:  Equity shares are those issued in accordance with the provisions of the Companies Act, 2013 and will include partly paid equity shares issued on or after July 8, 2014.
• Share warrants:  Share warrants issued on or after July 8, 2014 will be considered as capital instruments.
• Debentures:  ‘Debentures’ means fully, compulsorily and mandatorily convertible debentures.
• Preference shares:  ‘Preference’ shares means fully, compulsorily and mandatorily convertible preference shares.

A person resident outside India (other than an individual who is a citizen of Pakistan or Bangladesh or an entity which is registered/ incorporated in Pakistan or Bangladesh), may purchase convertible notes issued by an Indian start-up company for an amount of twenty five lakh rupees or more in a single tranche. A start-up company engaged in a sector where foreign investment requires Government approval may issue convertible notes to a non-resident only with the approval of the Government. The amount of consideration should be received by inward remittance through banking channels or by debit to the NRE/ FCNR (B)/ Escrow account maintained by the person concerned.

Foreign Investment means any investment made by a person resident outside India on a repatriable basis in capital instruments of an Indian company or to the capital of an LLP.

Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside India (a) in an unlisted Indian company; or (b) in 10 percent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.

Foreign Portfolio Investment is any investment made by a person resident outside India in capital instruments where such investment is (a) less than 10 percent of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company or (b) less than 10 percent of the paid up value of each series of capital instruments of a listed Indian company.

Once an FDI always an FDI.

As long as the foreign shareholding in the entity remains the same and there is no corporate action pursuant to the sector being brought under approval route, approval is not required.

No

All foreign investments are repatriable (net of applicable taxes) except in cases where the investment is made or held on non-repatriation basis.

The capital instrument has to be issued by the Indian company within sixty days from the date of receipt of the consideration.

Downstream investment is investment made by an Indian entity which has total foreign investment in it or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity.

If the investor company has total foreign investment in it and is not owned and not controlled by resident Indian citizens or is owned or controlled by persons resident outside India then such investment shall be “Indirect Foreign Investment” for the investee company.

Interest from foreign subsidiaries is fully taxable in the hands of the Indian company, with credit allowed for foreign tax withheld or paid, up to the Indian tax on the interest.

Yes, a non-resident can be a director of an Indian Company.

The first is the approval of the RBI and the second is registration with the Registrar of Companies (RoC). The license shall be issued for a term of 3 years and shall be extended thereafter. The closure of these foreign companies in India needs the approval of RBI and a report from RoC on the state of compliance.

FCRN is the short form of "Foreign Company Registration Number" which is an identification number for a foreign company doing business in India.

The attestation requirement depends on the country in which registered office (in case of body corporate as a subscriber) /residence of the overseas subscriber and / or director is situated. The documents are required to be attested are as follows:

• Proof of Residence in a country which is part of the Common Wealth, by a notary public of that country;
• Proof of Residence in a country which is party to the Hague Apostille Convention, 1961, attestation to be made by a notary public of the said country and duly apostilled in accordance with Hague Convention; or
• Proof of Residence in a country outside the Commonwealth, and which is not party to Hague Convention, authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) i.e. attested by Public Notary and authenticated by Indian Embassy in the country of residence.

Documents to be notarised and apostilled:

• Proof of identity
• CoI of the foreign body corporate, if applicable
• MoA
• AoA
• Document executed outside India (Place of execution determines whether the said document is to be notarised / apostilled / consularised)

Tenor of convertible instruments will be guided by the instructions framed under the Companies Act, 2013 and the rules framed thereunder. However, the investee company should ensure that the price/ conversion formula of convertible capital instruments is determined upfront at the time of issue of the instruments. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations.

A convertible note is an instrument issued by a start-up company evidencing receipt of money initially as debt, which is repayable at the option of the holder, or which is convertible into such number of equity shares of such startup company, within a period not exceeding five years from the date of issue of the convertible note, upon occurrence of specified events as per the other terms and conditions agreed to and indicated in the instrument.

Fully diluted basis means the total number of shares that would be outstanding if all possible sources of conversion are exercised.

No, FDI and FPI are agnostic from the point of view of the schedule under which investment has been made. It is the percentage which defines whether it is direct or portfolio investment.

Investment on repatriation basis means an investment, the sale/ maturity proceeds of which are, net of taxes, eligible to be repatriated out of India. The expression investment on non-repatriation basis may be construed accordingly.

Only NRIs/ OCIs are allowed to invest in partnership/ proprietorship concerns in India on non-repatriation basis.

There are no restrictions under FEMA for investment in Rights shares issued at a discount by an Indian company under the provisions of the Companies Act, 2013. The offer on rights basis to the persons resident outside India shall be:

• in case of shares of a company listed on a recognized stock exchange in India, at a price, as determined by the company; and
• in case of shares of a company not listed on a recognized stock exchange in India, at a price, which is not less than the price at which the offer on right basis is made to resident shareholders.

The following persons can acquire capital instruments on the stock exchanges:

• FPIs registered with SEBI
• NRIs

Other than (a) and (b) above, a person resident outside India, can acquire capital instruments on stock exchange, subject to the condition that the investor has already acquired and continues to hold the control of such company in accordance with SEBI (Substantial Acquisition of Shares and Takeover) Regulations.

If the capital instruments are not issued by the Indian company within sixty days from the date of receipt of the consideration, the amount so received has to be refunded to the person concerned by outward remittance, through banking channels or by credit to his NRE/ FCNR (B) accounts, as the case may be, within fifteen days from the date of completion of sixty days.