Documents for FDI

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This article depicts a short review on various documents required for FDI. Foreign direct investment (FDI) precisely means a long-term investment made by a foreign direct investor in an organization except the one in which the foreign direct investor is based. FDI usually comprise of a parent enterprise and a foreign affiliated concern in domestic market, which jointly forms a Transnational Corporation (TNC).

Documents for FDI in a Nutshell-

To acquire Foreign Direct Investments, the primary document required is 10 percent or more of the ordinary shares of an incorporated enterprise.

This means, the enterprise seeking FDI must have a control of the foreign parent organization over its affiliated firm in India. Ever since the Second World War, United States of America has been a major contributor in FDI. Between 1945 and 1960, United States accounted for around three-quarters of new FDI. FDI has become a booming phenomenon in global economy especially with FDI stocks occupying around 20 percent of global GDP. In the last few years, India and China have been the most flourishing destinations to receive the maximum of Foreign Direct Investments.

Documents Required for Foreign Direct Investments-

  • Application Form
  • Detailed information on the foreign investor or collaborators stating their parent enterprises and affiliated firms
  • Copies of the memorandum of collaborations made by the foreign investors
  • Detailed information on the Joint Venture firms or technical collaborators along with information on their parent enterprise, promoters, and affiliated firms
  • Companies aiming at establishing multi sectoral activities must present their details on the already existent activities with four digit NIC code
  • In case of any investments being carried out in a holding company, information about downstream investments are to be presented
  • Copies of the earlier approved proposals by FIPB or SIA or RBI connected with the current one
  • The board resolution of the investor company and the approval of transferred shareholder while transferring the existent equity
  • Before and after investments, the detailed information on shareholders of the investor concern
  • In case of indirect foreign investments, the details of the indirect route and the names of the foreign companies along with their shareholders
  • Justification for higher payments in terms of payments for technology or trademark or brand name which require FIPB approval under automatic route
  • Declaration from the investors stating their details
  • Detailed information on the existing ventures or enterprises
  • Remarks from Indian partners in case of the collaborations or the Joint ventures

Last Updated on 05/07/2011