Executive Summary:
This document outlines the Foreign Exchange Management (Cross Border Merger) Regulations, 2018, issued by the Reserve Bank of India. These regulations, effective from the date of publication in the Official Gazette (March 20, 2018), govern mergers, amalgamations, and arrangements between Indian and foreign companies as per the Foreign Exchange Management Act of 1999. The regulations define the conditions for inbound and outbound mergers and specify how resident individuals can acquire securities outside India.
Key Points / Main Content:
General Provisions:
Cross-border mergers pending before competent authority on the commencement date of these regulations will be governed by these regulations.
Acquisition or transfer of securities, debts, or assets outside India by Indian residents, and vice versa by non-residents, related to cross-border mergers, requires Reserve Bank permission unless otherwise provided.
Inbound Merger Regulations:
Securities: Resultant Indian companies may issue or transfer securities to non-residents, following pricing guidelines, entry routes, sectoral caps, and reporting norms per extant regulations. Specific conditions apply if the foreign company is a joint venture (JV) or wholly-owned subsidiary (WOS).
Offices: Foreign company offices outside India are deemed branches of the resultant Indian company, subject to relevant regulations.
Borrowings: Outstanding foreign borrowings must conform to External Commercial Borrowing (ECB), Trade Credit, or other foreign borrowing norms within two years. No remittance for liability repayment is allowed within two years. End-use restrictions do not apply.
Assets: The resultant company can acquire and hold permissible assets outside India. Non-permissible assets must be sold within two years, with proceeds repatriated immediately.
Bank Accounts: Foreign currency accounts may be opened overseas for up to two years for merger-related transactions.
Outbound Merger Regulations:
Securities: Indian residents may acquire securities of the resultant foreign company as per existing regulations.
Resident Individuals: Individuals can acquire securities outside India, subject to Liberalized Remittance Scheme limits.
Offices: Indian company offices are deemed branches of the resultant foreign company, subject to relevant regulations.
Liabilities: Outstanding borrowings of the Indian company are repaid as per the NCLT-sanctioned scheme. Liabilities payable to Indian lenders in Rupees must comply with regulations; a no-objection certificate is required from Indian lenders.
Assets: The resultant company can acquire and hold permissible assets in India. Non-permissible assets must be sold within two years, with proceeds repatriated.
Bank Accounts: A Special Non-Resident Rupee (SNRR) Account can be opened for up to two years for transactions under these regulations.
Valuation and Compensation:
Valuation: Valuation of Indian and foreign companies must follow Rule 25A of the Companies (Compromises, Arrangements, and Amalgamation) Rules, 2016.
Compensation: Compensation to security holders of either company can be paid as per the NCLT-sanctioned scheme.
Compliance and Reporting:
Regulatory Actions: Companies must ensure completion of any pending regulatory actions related to non-compliance before the merger.
Reporting: The resultant company and/or involved companies must furnish reports as prescribed by the Reserve Bank, in consultation with the Government of India.
Deemed Approval: Transactions compliant with these regulations are deemed to have prior Reserve Bank approval.
Certification: A certificate from the Managing Director/Whole Time Director and Company Secretary, if available, of the company/ies concerned ensuring compliance to these Regulations shall be furnished along with the application made to the NCLT.
Impact Analysis:
Indian Companies:
Impact: Must adhere to regulations when merging with foreign companies, impacting financial transactions, asset transfers, and regulatory compliance.
Action Required: Ensure compliance with the regulations, obtain necessary approvals and certifications, and report as required by the Reserve Bank.
Foreign Companies:
Impact: Must adhere to regulations when merging with Indian companies, impacting financial transactions, asset transfers, and regulatory compliance.
Action Required: Ensure compliance with the regulations, obtain necessary approvals and certifications, and report as required by the Reserve Bank.
Resident Individuals:
Impact: Can acquire securities of resultant foreign companies subject to prescribed limits and regulations.
Action Required: Comply with the Liberalized Remittance Scheme limits and reporting requirements.
Reserve Bank of India:
Impact: Responsible for overseeing and regulating cross-border mergers to ensure compliance with foreign exchange management regulations.
Action Required: Prescribe reporting requirements and monitor compliance with the regulations.
National Company Law Tribunal (NCLT):
Impact: Involved in sanctioning the scheme of cross-border merger.
Action Required: Consider compliance certificates during the application process under the Companies (Compromises, Arrangement or Amalgamation) Rules, 2016.
Key Entities Referenced
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Reserve Bank of India: The central bank of India, responsible for the regulation of the Indian banking system and foreign exchange management.
Foreign Exchange Management Cross Border Merger Regulations, 2018: Regulations issued by the Reserve Bank of India pertaining to mergers, amalgamations, and arrangements between Indian companies and foreign companies.
Companies Act, 2013: An Act of the Parliament of India which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
Companies Compromises, Arrangements and Amalgamation Rules, 2016: Rules notified under the Companies Act, 2013, which govern compromises, arrangements, and amalgamations between companies.
National Company Law Tribunal: A quasi-judicial body in India that adjudicates issues relating to Indian companies.
Mumbai, Maharashtra: City in Maharashtra, location of the Central Office of the Reserve Bank of India where the notification was issued.
Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India Regulations, 2017: Regulations related to the transfer or issue of security by a person resident outside India.
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EXTRAORDINARY
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PART II—Section 3—Sub-section (i)
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PUBLISHED BY AUTHORITY
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No. 153] NEW DELHI, TUESDAY, MARCH 20, 2018/PHALGUNA 29, 1939
भभभभााााररररततततीीीीयययय (cid:8)(cid:8)(cid:8)(cid:8)ररररज़ज़ज़ज़वववव (cid:11)(cid:11) (cid:11)(cid:11) बबबबकक(cid:13)(cid:13)कक(cid:13)(cid:13)
((((ििििववववददददशशेेशशेे ीीीी मममम(cid:10)(cid:10)ुु(cid:10)(cid:10)ुु ाााा ििििववववभभभभाााागगगग))))
((((कककक(cid:15)(cid:15)(cid:15)(cid:15)(cid:10)(cid:10)(cid:10)(cid:10)ीीीीयययय ककककााााययययाााालल(cid:17)(cid:17)लल(cid:17)(cid:17) यययय))))
अअअअििििधधधधससससचचूूचचूू ननननाााा
मुंबई, 20 माच (cid:4) 2018
ससससं.ं.ं.ं. फफफफेेेेममममाााा.... 333388889999////2222000011118888––––आआआआररररबबबबीीीी
ििििववववददददशशेेशशेे ीीीी मममम(cid:10)(cid:10)ुु(cid:10)(cid:10)ुु ाााा (cid:12)(cid:12)(cid:12)(cid:12)बबबबधधंंधधंं ((((ससससीीीीममममाााापपपपााााररररीीीीयययय ििििववववललललययययनननन)))) ििििववववििििननननययययममममााााववववललललीीीी,,,, 2222000011118888
Lkk-dk-fu- 244¼v½-————िवदशे ी मु(cid:13)ा (cid:14)बंध अिधिनयम, 1999 (42 of 1999) क(cid:22) धारा 47 के साथ प(cid:29)ठत
धारा (6) क(cid:22) उप-धारा(3) %ारा (cid:14)द& शि’य( का (cid:14)योग करते +ए (cid:29)रज़व(cid:4) बक. एतद%ारा भारतीय कंपिनय( तथा
िवदशे ी कंपिनय( के बीच िवलयन, समामेलन, तथा 1व2था से सबं ंिधत िन3िलिखत िविनयमावली िन5मत करता
ह:ै अथात(cid:4) : ् -
1111.... ससससििंंििंं (cid:26)(cid:26)(cid:26)(cid:26)(cid:27)(cid:27)(cid:27)(cid:27) ननननाााामममम औऔऔऔरररर (cid:12)(cid:12)(cid:12)(cid:12)ााााररररंंंंभभभभ
(i) ये िविनयम िवदशे ी मु(cid:13)ा (cid:14)बंध (सीमापारीय िवलयन) िविनयमावली, 2018 कहलाएगँ े।
(ii) ये िविनयम सरकारी राजप: म; उसके (cid:14)काशन क(cid:22) तारीख से लागू ह(गे।
2222.... पपपप(cid:30)(cid:30)(cid:30)(cid:30)ररररभभभभााााषषषषााााएएएए ँँ ँँ
इन िविनयम( म,; जब तक ?क संदभ(cid:4) से अ@यथा अपेिAत न हो,
(i) “अिधिनयम” का ताBपय(cid:4) िवदशे ी मु(cid:13)ा (cid:14)बंध अिधिनयम, 1999 (1999 का 42) से ह;ै
1617 GI/2018 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(ii) ‘कंपनी अिधिनयम’ का ताBपय(cid:4) कंपनी अिधिनयम, 2013 से ह;ै
(iii) ‘सीमापारीय िवलयन’ का ताBपय(cid:4) कंपनी अिधिनयम, 2013 के अंतग(cid:4)त अिधसूिचत कंपनी (समझौता,
1व2था तथा समामेलन) िनयमावली, 2016 के अनुसार ?कसी भारतीय कंपनी तथा ?कसी िवदशे ी कंपनी के
बीच ?कसी (cid:14)कार के िवलयन, समामेलन अथवा क(cid:22) गई ?कसी 1व2था से ह;ै
(iv) ‘िवदशे ी कंपनी” का ताBपय(cid:4) भारत के बाहर िनगिमत ?कसी कंपनी अथवा कॉपHरेट बॉडी से ह,ै भले ही
उसका भारत म; कारोबारी 2थान हो अथवा न ह(।
(cid:1)(cid:1)(cid:1)(cid:1)पपपप(cid:3)(cid:3)(cid:3)(cid:3)ीीीीककककररररणणणण:::: िनगा(cid:5)मी िवलयन(cid:12) के (cid:15)योजन से िवदशे ी कंपनी को कंपनी (समझौता, (cid:23)व(cid:24)था तथा समामेलन)
िनयमावली, 2016 के अनुबधं -बी म(cid:29) िविन(cid:30)द(cid:31) अिधकार#े$ म(cid:29) िनगिमत होना चािहए।
(v) “अंतगा(cid:4)मी िवलयन” का ताBपय(cid:4) ऐसे सीमापारीय िवलयन से ह ै जहां प(cid:29)रणामी कंपनी ((cid:29)रजMटNट कंपनी)
एक भारतीय कंपनी हो।
(vi) “भारतीय कंपनी” का ताBपय(cid:4) ?कसी ऐसी कंपनी से ह,ै जो कंपनी अिधिनयम, 2013 अथवा अ@य ?कसी
पूव(cid:4)वतO कंपनी काननू के अतं ग(cid:4)त िनगिमत क(cid:22) गई हो।
(vii) “एन.सी.एल.टी.” का ताBपय(cid:4) कंपनी अिधिनयम, 2013 अथवा उसके अंतग(cid:4)त बनाए गए िनयम( के तहत
यथा-प(cid:29)रभािषत राQीय कंपनी िविध अिधकरण (नेशनल कंपनी लR SीTयूनल) से ह।ै
(viii) “िनगा(cid:4)मी िवलयन” का ताBपय(cid:4) ऐस े सीमापारीय िवलयन स े ह,ै जहां (cid:29)रजMटNट कंपनी कोई िवदशे ी
कंपनी हो।
(ix) “(cid:29)रजMटNट कंपनी” का ताBपय(cid:4) ?कसी ऐसी भारतीय अथवा िवदशे ी कंपनी से ह,ै जो सीमापारीय िवलयन
म; सिUमिलत कंपिनय( क(cid:22) आि2तया ंतथा दये ताए ँले लते ी ह।ै
(x) इन िविनयम( म; (cid:14)यु’ ?क@तु प(cid:29)रभािषत न ?कए शTद( तथा अिभ1ि’य( का अथ(cid:4) Xमशः वही ह(गे जो
?क उ@ह ; अिधिनयम म; ?दये गए ह।.
3. अिधिनयम म; अथवा उसके अंतग(cid:4)त बनाए गए िनयम( अथवा िविनयम( म; ?कए गए (cid:14)ावधान( अथवा (cid:29)रज़व (cid:4) बक.
क(cid:22) सामा@य या िवशेष अनमु ित को छोड़कर, अ@य ?कसी भी तरीके स े भारत म ; िनवास करन े वाला कोई 1ि’
सीमापारीय िवलयन के कारण भारत के बाहर ?कसी (cid:14)कार क(cid:22) (cid:14)ितभूित अथवा ऋण अथवा आि2त का अजन(cid:4)
अथवा अंतरण नह^ करेगा तथा भारत के बाहर का िनवासी कोई 1ि’ सीमापारीय िवलयन के कारण भारत म;
कोई भी (cid:14)ितभूित अथवा ऋण अथवा आि2त का अज(cid:4)न अथवा अंतरण नह^ करेगा।
(cid:1)(cid:1)(cid:1)(cid:1)पपपप(cid:3)(cid:3)(cid:3)(cid:3)ीीीीककककररररणणणण :::: इन िविनयम( के लागू होने क(cid:22) तारीख को सAम (cid:14)ािधकारी के समA लंिबत सीमापारीय िवलयन(
सबं ंधी मामले इन िविनयम( के तहत अिधशािसत ह(गे ।
4444.... अअअअततंंततंं गगगगाााामम''मम'' ीीीी ििििववववललललययययनननन
अंतगा(cid:4)मी िवलयन म,;
(1) िवदशे ी मु(cid:13)ा (cid:14)बंध (भारत के बाहर के िनवासी ?कसी 1ि’ %ारा (cid:14)ितभूित का अंतरण अथवा िनग(cid:4)म)
िविनयमावली, 2017 म; यथा-िविन_द‘ मूMय-िनधा(cid:4)रण ?दशािनदशa , (cid:14)वेश माग,(cid:4) Aे:-आधा(cid:29)रत सीमाए,ं
अनुवतO ?दशा-िनदशa तथा (cid:29)रपोbटग अपेAाए ँ आ?द के अधीन रहते +ए (cid:29)रजMटNट कंपनी भारत के िनवासी
अथवा भारत के बाहर के िनवासी 1ि’ को कोई (cid:14)ितभूित और/अथवा कोई िवदशे ी (cid:14)ितभूित, जैसा भी
मामला हो, जारी अथवा अंत(cid:29)रत कर सकती ह।ै¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 3
बशतa ?क
(i) जहां िवदशे ी कंपनी ?कसी भारतीय कंपनी का संयु’ उeम (JV) / पूण(cid:4) 2वािमBव वाली सहायक
कंपनी (WOS) हो, वहाँ भारतीय पाटO %ारा ऐसे संयु’ उeम (JV) / पूण(cid:4) 2वािमBव वाली सहायक
कंपनी (WOS) के शेयर( के अंतरण के सबं ंध म; िवदशे ी मु(cid:13)ा (cid:14)बंध (िवदशे ी (cid:14)ितभूित का अंतरण
अथवा िनग(cid:4)म) िविनयमावली, 2004 के अंतग(cid:4)त िविन_द‘ शतf क अनुपालन ?कया जाए।
(ii) जहां अंतगा(cid:4)मी िवलयन के प(cid:29)रणाम2वgप ?कसी का य?द संयु’ उeम (JV) / पूण(cid:4) 2वािमBव वाली
सहायक कंपनी (WOS) %ारा भारतीय पाटO के ?कसी का संयु’ उeम (JV) / पूण(cid:4) 2वािमBव वाली
सहायक कंपनी (WOS) क(cid:22) उप-अनुषंगी सहायक कंपनी (2टेप-डाउन सिTसिडअरी) का अिधhहण हो
रहा हो, तो ऐसे मामल( म; िवदशे ी मु(cid:13)ा (cid:14)बंध (िवदशे ी (cid:14)ितभूित का अंतरण अथवा िनग(cid:4)म)
िविनयमावली, 2004 के तहत अिधhहण सबं ंधी िविनयम 6 एवं 7 का अनुपालन ?कया जाए।
(2) सीमापारीय िवलयन क(cid:22) योजना क(cid:22) 2वीकृित के अनुसार िवदशे ी कंपनी के भारत के बाहर के काया(cid:4)लय को
िवदशे ी मु(cid:13)ा (cid:14)बंध (भारत म; िनवासी ?कसी 1ि’ %ारा िवदशे ी मु(cid:13)ा खाता) िविनयमावली, 2015 के अनुसार
(cid:29)रजMटNट कंपनी क(cid:22) भारत के बाहर क(cid:22) शाखा/ काया(cid:4)लय माना जाएगा। तदनुसार (cid:29)रजMटNट कंपनी ऐसा कोई भी
लेन-दने कर सकती ह ै िजसे उपयु(cid:4)’ िविनयमावली के अतं गत(cid:4) शाखा/ काया(cid:4)लय को करने क(cid:22) अनुमित हो।
(3) िवदशे ी कंपनी %ारा समु(cid:13)परीय jोत( से कोई गारंटी, अथवा उधार अथवा भावी उधार जो (cid:29)रजMटNट कंपनी का
उधार बनगे ा अथवा समु(cid:13)-पारीय jोत( स े जुटाया गया कोई उधार, िजसक(cid:22) (cid:14)िवि‘ (cid:29)रजMटNट कंपनी क(cid:22) खाता-
बिहय( म; क(cid:22) जाएगी उसे दो वषf क(cid:22) अविध के भीतर यथा लागू बाk वािणिlयक उधार सबं ंधी मानदडं ( अथवा
1ापार ऋण मानदडं अथवा िवदशे ी मु(cid:13)ा (cid:14)बंध (िवदशे ी मु(cid:13)ा म; उधार लेना अथवा उधार देना) िविनयमावली,
2000 अथवा िवदशे ी मु(cid:13)ा (cid:14)बंध (mपये म; उधार लेना अथवा उधार दने ा) िविनयमावली, 2000 अथवा िवदशे ी
मु(cid:13)ा (cid:14)बंध (गारंटी) िविनयमावली, 2000 के अंतग(cid:4)त िनधा(cid:4)(cid:29)रत ?कसी अ@य िवदशे ी उधार मानदडं ( के अनसु ार ?कया
जाएगा।
बशतa ?क दो वषf क(cid:22) ऐसी अविध के भीतर ऐसी ?कसी दये ता क(cid:22) चुकौती के िलए भारत से कोई (cid:14)ेषण नह^ ?कया
जाए।
बशतa यह भी ?क अंितम उपयोग (एंड यज़ू ) से संबंिधत शतo लाग ूनह^ ह(गी।
(4) (cid:29)रजMटNट कंपनी भारत के बाहर एसी ?कसी आि2त का अज(cid:4)न अथवा धारण कर सकती ह,ै िजसे अिधिनयम के
(cid:14)ावधान(, उसके अतं ग(cid:4)त बनाए गए िनयम(, िविनयम( के तहत ?कसी भारतीय कंपनी को अ5जत करने क(cid:22) अनुमित
ह।ै ऐसी आि2तय( को अिधिनयम अथवा उसके अतं गत(cid:4) बनाए गए िनयम अथवा िविनयम के अंतगत(cid:4) अनुमत लेन-दने
करने के िलए ?कसी भी (cid:14)कार से अंत(cid:29)रत ?कया जा सकता ह।ै
(5) जहां अिधिनयम, िनयम अथवा िविनयम( के अंतगत(cid:4) (cid:29)रजMटNट कंपनी को भारत के बाहर क(cid:22) आि2त अथवा
(cid:14)ितभूित को अ5जत अथवा धा(cid:29)रत करने क(cid:22) अनुमित नह^ ह,ै वहाँ (cid:29)रजMटNट कंपनी एन.सी.एल.टी. %ारा योजना
को 2वीकृित (cid:14)दान करने क(cid:22) तारीख स े दो वषf क(cid:22) अविध के भीतर ऐसी आि2त अथवा (cid:14)ितभूित को बचे दगे ी और
िबX(cid:22)गत आय को ब.pकग चनै ल के माqयम से तBकाल भारत म; (cid:14)Bयाव5तत ?कया जाएगा। जहां (cid:29)रजMटNट कंपनी को
भारत के बाहर क(cid:22) कोई दये ता धा(cid:29)रत करने क(cid:22) अनुमित नह^ ह,ै वहाँ दो वष(cid:4) क(cid:22) अविध के भीतर ऐसी समु(cid:13)पारीय
आि2तय( क(cid:22) िबX(cid:22)गत आय म; से उन दये ताr को समाs ?कया जाए।4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(6) एन.सी.एल.टी. %ारा योजना को 2वीकृित (cid:14)दान करने क(cid:22) तारीख से दो वष(cid:4) क(cid:22) अिधकतम अविध के िलए
(cid:29)रजMटNट कंपनी सीमा-पारीय िवलयन से सबं ंिधत लेन-दने करने के (cid:14)योजन से समु(cid:13)पारीय अिधकारAे: म; िवदशे ी
मु(cid:13)ा ब.क खाता खोल सकती ह ै।
5555.... ििििननननगगगगाााामम''मम'' ीीीी ((((आआआआउउउउटटटट----बबबबााााउउउउंंंंडडडड)))) ििििववववललललययययनननन ::::
?कसी िनगा(cid:4)मी िवलयन म;:
(1) भारत म; िनवासी कोई 1ि’ िवदशे ी मु(cid:13)ा (cid:14)बंध (िवदशे ी (cid:14)ितभूित का अतं रण अथवा िनग(cid:4)म)
िविनयमावली, 2004 के अनुसार (cid:29)रजMटNट कंपनी क(cid:22) (cid:14)ितभूितयाँ अ5जत अथवा धा(cid:29)रत कर सकता ह।ै
(2) िनवासी 1ि’ भारत के बाहर क(cid:22) (cid:14)ितभूितयाँ अ5जत कर सकता ह ै बशतa ऐसी (cid:14)ितभूितय( का उिचत
बाजार मूMय अिधिनयम अथवा उसके तहत िन5मत िनयम( अथवा िविनयम( म ; उिMलिखत उदारीकृत
िव(cid:14)ेषण योजना के (cid:14)ावधान( के अंतग(cid:4)त िनधा(cid:4)(cid:29)रत सीमाr के भीतर हो।
(3) सीमापारीय िवलयन योजना क(cid:22) 2वीकृित के अनुसार भारतीय कंपनी के भारत म; ि2थत कायाल(cid:4) य को
िवदशे ी मु(cid:13)ा (cid:14)बंध (भारत म; ?कसी शाखा काया(cid:4)लय अथवा संपक(cid:4) काया(cid:4)लय अथवा प(cid:29)रयोजना काया(cid:4)लय
अथवा कारोबारी 2थल क(cid:22) 2थापना) िविनयमावली, 2016 के अनुसार (cid:29)रजMटNट कंपनी का भारत म ;
शाखा काया(cid:4)लय समझा जाएगा। तदनुसार (cid:29)रजMटNट कंपनी उ’ िविनयमावली के अतं गत(cid:4) शाखा काया(cid:4)लय
के िलए अनमु त कोई भी लेन- दने कर सकती ह।ै
(4) भारतीय कंपनी क(cid:22) गारं(cid:29)टयाँ अथवा बकाया उधार, जो (cid:29)रजMटNट कंपनी क(cid:22) दये ताएं बन जाती ह,. को
कंपनी (समझौता, 1व2था तथा समामेलन) िनयमावली, 2016 के तहत एन.सी.एल.टी. %ारा 2वीकृत
योजना के अनुसार चुकाया/ लौटाया जाएगा।
बशतa ?क (cid:29)रजMटNट कंपनी ?कसी भारतीय उधरदाता के (cid:14)ित mपये म; दये ऐसी कोई भी दये ता अ5जत नह^
करेगी जो ?क अिधिनयम, अथवा उसके अंतग(cid:4)त जारी िनयम( अथवा िविनयम( के अनgु प नह^ ह।.
बशतa यह भी ?क भारतीय कंपनी के भारत म; ि2थत उधारदाताr स े इस आशय का अनापि& (cid:14)माणप:
(cid:14)ाs ?कया जाए।
(5) (cid:29)रजMटNट कंपनी, भारत म; ऐसी कोई आि2त अ5जत अथवा धा(cid:29)रत कर सकती है, िज@ह; अ5जत करने के
संबंध म; अिधिनयम के अंतग(cid:4)त बनाए गए िनयम( अथवा िविनयम( के (cid:14)ावधान( के अंतग(cid:4)त िवदेशी
कंपनी को अनुमित दी गई है। ऐसी आि2तय( को अिधिनयम अथवा उसके अंतग(cid:4)त बनाए गए िनयम(
अथवा िविनयमावली के अंतग(cid:4)त अनुमत लेन-देन करने के िलए ?कसी भी (cid:14)कार से अंत(cid:29)रत ?कया जा
सकता ह।ै
(6) जहां अिधिनयम, िनयम अथवा िविनयमावली के अंतग(cid:4)त भारत म; आि2त अथवा (cid:14)ितभूित को अ5जत
अथवा धा(cid:29)रत नह^ ?कया जा सकता ह,ै वहाँ (cid:29)रजMटNट कंपनी एन.सी.एल.टी. %ारा योजना को 2वीकृित
(cid:14)दान करने क(cid:22) तारीख से दो वष(cid:4) क(cid:22) अविध के भीतर ऐसी आि2त अथवा (cid:14)ितभूित को बेच देगी और
िबX(cid:22)गत आय को ब.pकग चैनल के माqयम से तBकाल भारत से बाहर (cid:14)Bयाव5तत करेगी। दो वष(cid:4) क(cid:22)
अविध के भीतर ऐसी आि2तय( अथवा (cid:14)ितभूितय( क(cid:22) िबX(cid:22)गत आय से भारतीय देयताr क(cid:22) चुकौती
अनुमत है।
(7) इन िविनयम( के अंतग(cid:4)त लेन-दने करने के (cid:14)योजन स े (cid:29)रजMटNट कंपनी िव?दशी मु(cid:13)ा (cid:14)बंध (जमा)
िविनयमावली, 2016 के अनुसरण म; भारत म; अिनवासी mपया खाता (SNRR Account) खोल सकती
ह।ै उ’ खाता एन.सी.एल.टी. %ारा योजना क(cid:22) 2वीकृित क(cid:22) तारीख से दो वष(cid:4) क(cid:22) अिधकतम अविध के िलए
चलेगा।¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 5
6666.... ममममू.ू.ू.ू.ययययााााककंंककंं नननन
(1)भारतीय कंपनी तथा िवदशे ी कंपनी का मूMयांकन कंपनी (समझौता, 1व2था तथा समामेलन) िनयमावली,
2016 के िनयम 25 ए के अनुसार ?कया जाएगा।
7777.... ििििववववििििववववधधधध
(1) भारतीय कंपनी अथवा िवदशे ी कंपनी के (cid:14)ितभूित धारक को, जैसा भी मामला हो, (cid:29)रजMटNट कंपनी %ारा
?कए जाने वाल े मुआवज े का भुगतान एन.सी.एल.टी. %ारा 2वीकृत योजना के अनुसार होगा।
(2) सीमापारीय िवलयन म; शािमल होने वाली कंपिनय( को िविनयामी कार(cid:4)वाइया,ँ य?द कोई हो, जैस:े
अिधिनयम अथवा उसके अतं गत(cid:4) िन5मत िनयम( अथवा िविनयम( के अन-नुपालन, उMलंघन, िनयम-भंग, जैसा
भी मामला हो, को िवलयन से पहले ही पूरा कर िलया जाए ।
8888.... (cid:30)(cid:30)(cid:30)(cid:30)ररररपपपपोोोो2222टटटटगगगग
(1) (cid:29)रजMटNट कंपनी तथा/ अथवा सीमापारीय िवलयन म; शािमल कंपनी (कंपिनय() को (cid:29)रज़व (cid:4) ब.क %ारा भारत
सरकार के परामश(cid:4) स,े समय-समय पर यथा-िविन_द‘ फ़ारमैट म; (cid:29)रपोटo (cid:14)2तुत करनी ह(गी।
9999....अअअअननननममुुममुु ााााििििननननतततत अअअअननननममुुममुु ोोोोददददनननन
(1) यह मान िलया जाएगा ?क इन िविनयम( के अंतगत(cid:4) िसमापारीय िवलयन के प(cid:29)रणाम2वgप ?कए गए
?कसी भी लेन-दने के िलए कंपनी (समझौता, 1व2था तथा समामेलन) िनयमावली, 2016 के िनयम 25-ए
के अंतग(cid:4)त अपेिAत ?कए गए अनुसार (cid:29)रज़व(cid:4) बैक का पूव(cid:4) अनुमोदन ह।ै
(2) कंपनी (समझौता, 1व2था तथा समामेलन) िनयमावली, 2016 के अंतग(cid:4)त एन.सी.एल.टी. को ?कए गए
आवेदन के साथ संबंिधत कंपनी (कंपिनय() के (cid:14)बंध िनदशे क/पूण(cid:4)-कािलक िनदशे क एव ं कंपनी सिचव स े इस
आशय का (cid:14)माणप: भी (cid:14)2तुत ?कया जाए ?क इन िविनयम( का अनुपालन सुिनिxत ?कया गया ह।ै
[Qk- la- 1@1@b,Z e@2017]
lयोित कुमार पांड,े मुyय महा(cid:14)बंधक
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
NOTIFICATION
Mumbai, the 20th March, 2018
No. FEMA. 389 /2018-RB
Foreign Exchange Management (Cross Border Merger) Regulations, 2018
G.S.R. 244(E).—In exercise of the powers conferred by sub-section (3) of section (6) read with section 47 of
the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank makes the following regulations relating to
merger, amalgamation and arrangement between Indian companies and foreign companies, namely:
1. Short title and commencement
(i) These Regulations may be called the Foreign Exchange Management (Cross Border Merger)
Regulations, 2018.6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(ii) They shall come into force from the date of their publication in the Official Gazette.
2. Definitions
In these Regulations unless the context requires otherwise, -
(i) ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii) ‘Companies Act’ means The Companies Act, 2013;
(iii) ‘Cross border merger’ means any merger, amalgamation or arrangement between an Indian company
and foreign company in accordance with Companies (Compromises, Arrangements and
Amalgamation) Rules, 2016 notified under the Companies Act, 2013;
(iv) ‘Foreign company’ means any company or body corporate incorporated outside India whether having a
place of business in India or not;
Explanation: for the purpose of outbound mergers, the foreign company should be incorporated in a
jurisdiction specified in Annexure B to Companies (Compromises, Arrangements and Amalgamation)
Rules, 2016;
(v) ‘Inbound merger’ means a cross border merger where the resultant company is an Indian company;
(vi) Indian company’ means a company incorporated under the Companies Act, 2013 or under any previous
company law;
(vii) ‘NCLT’ means National Company Law Tribunal as defined under the Companies Act, 2013 or rules
framed thereunder;
(viii) ‘Outbound merger’ means a cross border merger where the resultant company is a foreign company;
(ix) ‘Resultant company’ means an Indian company or a foreign company which takes over the assets and
liabilities of the companies involved in the cross border merger;
(x) The words and expressions used but not defined in these Regulations shall have the same meanings
respectively assigned to them in the Act.
3. Save as otherwise provided in the Act or rules or regulations framed thereunder or with the general or special
permission of Reserve Bank, no person resident in India shall acquire or transfer any security or debt or asset outside
India and no person resident outside India shall acquire or transfer any security or debt or asset in India on account of
cross border mergers.
Explanation: Cross Border Mergers pending before the competent authority as on date of commencement of these
regulations shall be governed by these Regulations.
4. Inbound merger
In an inbound merger,
(1) the resultant company may issue or transfer any security and/or a foreign security, as the case may be, to
a person resident outside India in accordance with the pricing guidelines, entry routes, sectoral caps,
attendant conditions and reporting requirements for foreign investment as laid down in Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017.
Provided that
(i) where the foreign company is a joint venture (JV)/ wholly owned subsidiary (WOS) of
the Indian company, it shall comply with the conditions prescribed for transfer of shares
of such JV/ WOS by the Indian party as laid down in Foreign Exchange Management
(Transfer or issue of any foreign security) Regulations, 2004;
(ii) where the inbound merger of the JV/WOS results into acquisition of the Step down
subsidiary of JV/ WOS of the Indian party by the resultant company, then such
acquisition should be in compliance with Regulation 6 and 7 of Foreign Exchange
Management (Transfer or issue of any foreign security) Regulations, 2004.
(2) An office outside India of the foreign company, pursuant to the sanction of the Scheme of cross border
merger shall be deemed to be the branch/office outside India of the resultant company in accordance with¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 7
the Foreign Exchange Management (Foreign Currency Account by a person resident in India)
Regulations, 2015. Accordingly, the resultant company may undertake any transaction as permitted to a
branch/office under the aforesaid Regulations.
(3) The guarantees or outstanding borrowings of the foreign company from overseas sources which become
the borrowing of the resultant company or any borrowing from overseas sources entering into the books
of resultant company shall conform, within a period of two years, to the External Commercial Borrowing
norms or Trade Credit norms or other foreign borrowing norms, as laid down under Foreign Exchange
Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 or Foreign Exchange
Management (Borrowing or Lending in Rupees) Regulations, 2000 or Foreign Exchange Management
(Guarantee) Regulations, 2000, as applicable.
Provided that no remittance for repayment of such liability is made from India within such period of two
years;
Provided further that the conditions with respect to end use shall not apply.
(4) The resultant company may acquire and hold any asset outside India which an Indian company is
permitted to acquire under the provisions of the Act, rules or regulations framed thereunder. Such assets
can be transferred in any manner for undertaking a transaction permissible under the Act or rules or
regulations framed thereunder.
(5) Where the asset or security outside India is not permitted to be acquired or held by the resultant company
under the Act, rules or regulations, the resultant company shall sell such asset or security within a period
of two years from the date of sanction of the Scheme by NCLT and the sale proceeds shall be repatriated
to India immediately through banking channels. Where any liability outside India is not permitted to be
held by the resultant company, the same may be extinguished from the sale proceeds of such overseas
assets within the period of two years.
(6) The resultant company may open a bank account in foreign currency in the overseas jurisdiction for the
purpose of putting through transactions incidental to the cross border merger for a maximum period of
two years from the date of sanction of the Scheme by NCLT.
5. Outbound merger
In an outbound merger,
(1) a person resident in India may acquire or hold securities of the resultant company in accordance with
the Foreign Exchange Management (Transfer or issue of any Foreign Security) Regulations, 2004.
(2) a resident individual may acquire securities outside India provided that the fair market value of such
securities is within the limits prescribed under the Liberalized Remittance Scheme laid down in the Act
or rules or regulations framed thereunder.
(3) An office in India of the Indian company, pursuant to sanction of the Scheme of cross border merger,
may be deemed to be a branch office in India of the resultant company in accordance with the Foreign
Exchange Management (Establishment in India of a branch office or a liaison office or a project office
or any other place of business) Regulations, 2016. Accordingly, the resultant company may undertake
any transaction as permitted to a branch office under the aforesaid Regulations.
(4) The guarantees or outstanding borrowings of the Indian company which become the liabilities of the
resultant company shall be repaid as per the Scheme sanctioned by the NCLT in terms of the
Companies (Compromises, Arrangement or Amalgamation) Rules, 2016.
Provided that the resultant company shall not acquire any liability payable towards a lender in India in
Rupees which is not in conformity with the Act or rules or regulations framed thereunder.
Provided further that a no-objection certificate to this effect should be obtained from the lenders in
India of the Indian company.
(5) The resultant company may acquire and hold any asset in India which a foreign company is permitted
to acquire under the provisions of the Act, rules or regulations framed thereunder. Such assets can be8 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
transferred in any manner for undertaking a transaction permissible under the Act or rules or
regulations framed thereunder.
(6) Where the asset or security in India cannot be acquired or held by the resultant company under the Act,
rules or regulations, the resultant company shall sell such asset or security within a period of two years
from the date of sanction of the Scheme by NCLT and the sale proceeds shall be repatriated outside
India immediately through banking channels. Repayment of Indian liabilities from sale proceeds of
such assets or securities within the period of two years shall be permissible.
(7) The resultant company may open a Special Non-Resident Rupee Account (SNRR Account) in
accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 for the purpose of
putting through transactions under these Regulations. The account shall run for a maximum period of
two years from the date of sanction of the Scheme by NCLT.
6. Valuation
(1) The valuation of the Indian company and the foreign company shall be done in accordance with Rule 25A of the
Companies (Compromises, Arrangement or Amalgamation) Rules, 2016.
7. Miscellaneous
(1) Compensation by the resultant company, to a holder of a security of the Indian company or the foreign
company, as the case may be, may be paid, in accordance with the Scheme sanctioned by the NCLT.
(2) The companies involved in the cross border merger shall ensure that regulatory actions, if any, prior to merger,
with respect to non-compliance, contravention, violation, as the case may be, of the Act or the Rules or the
Regulations framed thereunder shall be completed.
8. Reporting
(1) The resultant company and/or the companies involved in the cross border merger shall be required to furnish
reports as may be prescribed by the Reserve Bank, in consultation with the Government of India, from time to
time.
9. Deemed approval
(1) Any transaction on account of a cross border merger undertaken in accordance with these Regulations shall be
deemed to have prior approval of the Reserve Bank as required under Rule 25A of the Companies
(Compromises, Arrangement and Amalgamations) Rules, 2016.
(2) A certificate from the Managing Director/Whole Time Director and Company Secretary, if available, of the
company(ies) concerned ensuring compliance to these Regulations shall be furnished along with the application
made to the NCLT under the Companies (Compromises, Arrangement or Amalgamation) Rules, 2016.
[F. No. 1//1/EM/2017]
JYOTI KUMAR PANDEY, Chief General Manager
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