Foreign Direct Investment is a boost for Start-Ups in India
Foreign direct investment has been one of the highly considered investments for Business expansion. Indian start-up raises their full capital from foreign ventures. Make in India is a platform set by Indian Government to encourage start-ups in India. The step has given pace to the economic growth in India. Liberalisation is one of key role to play in India boost Business and economic policies. Making India a destination for the investors.SME and other small private limited Company has also got the lamp in their hand to showcase their talent.
Foreign Direct Investment for Private Limited Company has opened a treasure of more Business in India and has boosted the concept of entrepreneurship. Many companies can activate foreign investment through the issue of convertible preference shares.
FDI also give good bond to good Business relation outside India. According to data from start-up intelligence the deal count for the first half (H1) of 2017 was down by 27 per cent on a year-on-year basis. Many Companies get investment at the crucial time and Indian venture capital funds have not grown which has led the funds to dry up.FDI has encourage the inflow of funds in India as foreign investors are likely to get better returns from Indian start-ups than European ones. According to the policy of FDI separate section and spells out provisions that allow them to raise foreign money from venture capital funds and other investors through instruments such as convertible notes.
Non residential Indian are allowed will be permitted to purchase convertible notes issued by an Indian start-up company. There are certain policies under Goods and service tax for non residential Indian. Consideration of Start-ups in FDI arrangement permitting 100 FVCI is an awesome activity by the administration. This activity will help part many new companies to access genuinely necessary capital which now and again ends up plainly awkward because of procedural issues. The administration has taken proactive measures in supporting new businesses and permitting 100% FVCI is clear sign of significance what new businesses have in government's plan of thing.
Salient features of FDI
- Bonds are expressed in Foreign Currency
- Principle Amount and interest amount is to be paid in foreign currency.
- Foreign Capital Equity Bond is issued by the company which is a part of promoter group of a listed company.
- Foreign Direct Investment hold shares offered in the company
- FCEB permits for investment in capital market or in real estate in India.