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FDI and Issue of Shares for Consideration Other than Cash

Updated: Jan 18, 2022

The introduction of guidelines on Indian companies issuing shares to foreign entities for considerations other than cash, was brought about pursuant to the Foreign Direct Investment Policy in April 2011. This was primarily with the objective of keeping a tab on possible FDI policy violation and money laundering in the wake of rising number of cases, where shares were issued against non-cash considerations like trade payables and import of capital goods.

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