FDI calculation for the issuance of Employee Stock Options
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Juhee Goyal /
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10-Jan-2023 04:49 AM /
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Whether the percentage of foreign investment should be calculated at the time of issuance of Employee Stock Options (ESOP) or vesting stage or exercising stage?
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Posted By : Juhee Goyal /
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22-Aug-2023 05:29 AM /
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Whether the concept of Alternate Director also applicable in case of Foreign Director as he is already residing outside India ?
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Posted By : Juhee Goyal /
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22-Aug-2023 05:26 AM /
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In case of appointment of Alternate Director, whether the Master Data of the Company reflects the Original Director too ?
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Posted By : Juhee Goyal /
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15-Jul-2023 04:55 AM /
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In what circumstances, special notice is required for the appointment of person other than the retiring auditor ?
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Posted By : Juhee Goyal /
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14-Jul-2023 05:05 AM /
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What is the offer period of private placement offer cum application letter in case shares are issued on private placement basis ?
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Posted By : Juhee Goyal /
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13-Jul-2023 05:56 AM /
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Is it possible to file the Unaudited Financial Statements of a Company, if yes, whether there is any option to file the Audited Financial Statements after filing of Unaudited Financials ?
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Posted By : Juhee Goyal /
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12-Jul-2023 05:07 AM /
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If an individual does not hold majority stake in the member company of the reporting company, whether filing of BEN-2 is applicable or not?
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Posted By : Juhee Goyal /
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28-Jun-2023 08:39 AM /
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Are there any restrictions or limitations on the number of foreign directors in an Indian Company ?
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Posted By : Juhee Goyal /
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27-Jun-2023 04:13 AM /
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Whether, any assets or liabilities for Indian party (i.e. domestic assets and liabilities) are to be included in the FLA return?
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As per the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, the calculation of foreign investment in an Indian company with ESOPs will depend on the stage at which the foreign employees exercise the options.
If the foreign employee exercises the ESOPs and acquires shares in the Indian company, then the foreign investment will be calculated based on the percentage of foreign equity held after the issuance of shares.
On the other hand, if the foreign employee sells the shares acquired through ESOPs, the calculation of foreign investment will be based on the percentage of foreign equity held at the time of exercising the ESOPs.
It is important for companies to monitor their foreign investment levels, and seek necessary approvals if they exceed the prescribed thresholds.
It is worth noting that if the foreign investment in the company exceeds the sectoral cap, then the company would be required to obtain prior approval from the Foreign Investment Promotion Board (FIPB) or the Reserve Bank of India (RBI), as applicable.