FDI consolidated policy includes start-ups, allows 100% FVCI
28 Aug 2017 10:27 PM IST
New Delhi: The Commerce Ministry in its consolidated FDI policy document released on Monday has for the first time included start-ups, which can raise up to 100 per cent of funds from Foreign Venture Capital Investor (FVCI).
Start-ups can issue equity or equity linked instruments or debt instruments to FVCI against receipt of foreign remittance, said the document which incorporates all the changes made in FDI policy over the past year.
"In addition, startups can issue convertible notes to person resident outside India (subject to certain conditions)," it said.
A person resident outside India (other than citizens/ entities of Pakistan and Bangladesh) will be permitted to purchase convertible notes issued by an Indian startup company for an amount of Rs 25 lakh or more in a single tranche.
NRIs can also acquire convertible notes on non- repatriation basis , said the document of Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.
"A startup company engaged in a sector where foreign investment requires Government approval may issue convertible notes to a non-resident only with approval of the Government," it said, adding that the startup issuing convertible notes would be required to furnish reports as prescribed by the RBI.
The government is focusing on startup companies to promote job creation and innovation.
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