Notification

  • Image

    Join us for an insightful session Navigating Due Diligence for Startups & Investors – 26th June 2025, 3PM onwards.

    Read More
  • Not Able to Find What You’re Looking For? Speak to us directly! Our experts are here to guide you through any queries or challenges.

    Speak to Us

Exciting Developments in relation to Foreign Investment Policy in India!

The Reserve Bank of India (RBI) has introduced further liberalizations in Foreign Direct Investment (FDI) rules through its latest Master Direction on Foreign Investment, dated January 20, 2025.

Key changes:

1. Flexible Acquisition Options for FOCC: Previously, Foreign Owned and Controlled Corporations (FOCCs) with over 50% foreign shareholding investing in another Indian entity for downstream investments were required to remit the entire deal value upfront. The revised framework introduces much needed flexibility, aligning with the standard FDI provisions:

a) Deferred payment – 25% of the transaction value may be deferred over a period of 18 months.

b) Share Swaps – downward investment through share swaps is now permissible i.e. issue of its own shares in lieu of receipt of shares of the investee company.

2.Tenor Flexibility for CCD/CCPS: The tenor of Compulsorily Convertible Debentures (CCDs) and Compulsorily Convertible Preference Shares (CCPS) can now be amended in accordance with the Companies Act, 2013. This is especially beneficial when share conversion needs to be postponed due to fluctuating market conditions.

These changes significantly enhance regulatory clarity and operational flexibility for M&A and investments. This would aid in fostering global-local partnerships, boost investor confidence, and catalyze growth for businesses across India.

What does this mean for you? Let’s connect at dhairya.c@treelife.in for a discussion.

Link to the updated Master direction on Foreign Investment – https://lnkd.in/dUC9sxUD 

About the Author
Treelife
Treelife
Treelife Team | support@treelife.in

We are a legal and finance firm with a deep focus on the startup ecosystem. We offer a wide range of services, including Virtual CFO, Legal Support, Tax & Regulatory, and Global Expansion assistance.

Our goal at Treelife is to provide you with peace of mind and ease in business.

We Are Problem Solvers. And Take Accountability.

Related Posts

Are You Paying the Right Tax on Your Virtual Digital Assets (VDAs)? Here’s What You Need to Know Before Filing Your ITR
Are You Paying the Right Tax on Your Virtual Digital Assets (VDAs)? Here’s What You Need to Know Before Filing Your ITR

With India’s growing adoption of cryptocurrencies, NFTs, and tokens, it's critical for investors and traders to understand how these Virtual...

Learn MoreLearn More
Understanding Valuation Rules for Share Transfers (Post Angel Tax Removal)
Understanding Valuation Rules for Share Transfers (Post Angel Tax Removal)

With the removal of Section 56(2)(viib), commonly known as Angel Tax, the landscape for startup funding and share transfers has...

Learn MoreLearn More
Raising Funds from Friends and Family(F&F) – Early-Stage Startups
Raising Funds from Friends and Family(F&F) – Early-Stage Startups

Raising funds from friends and family is a common strategy for early-stage startups, particularly during the initial or pre-revenue phase....

Learn MoreLearn More

For Customer Support

Mumbai | Delhi |
Bangalore | GIFT City

Speak to Us!

We respond within 60 minutes.

    Your information is confidential and secure

    For Customer Support

    Mumbai | Delhi |
    Bangalore | GIFT City

    Fill out the form to unlock the full report!

    Image