DOING BUSINESS WITH INDIA
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FORM FC (RBI) APPLICATION FOR APPROVAL OF FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER AGREEMENT i) All applications for permission under paragraphs 39 B(iv), 39 C(i) and 39 c(ii) of the Statement of Industrial Policy (July 1991) are to be submitted to the Controller, Foreign Investment & Technology Transfer Section (FITT), Exchange Control Department, Central Office, Reserve Bank of India, Bombay-400 023 (in 10 copies). One application along with 9 photocopies would be acceptable. ii) Entrepreneurs may go through the "Note For Guidance of Entrepreneurs For Foreign Investment and Technology Transfer Agreement" (attached to this form) carefully before filling up the details in the form. The Note contains relevant extracts of the Statement of Industrial Policy, standard conditions attached to approvals for foreign investment/foreign technology agree- ments, procedure for hiring foreign technicians, foreign testing of indigenous raw materials and products and indigenously de- veloped technology, deputation of Indian technicians abroad and a note on Indian Trade Classification (Harmonised System). /---------------------------------------------------------------\ | (for office use only) | | ___ ___ ___ ___ ___ ___ ___ ___ | | 1. Dt. of receipt |___|___| |___|___| |___|___|___|___| | | ___ ___ ___ ___ ___ ___ ___ ___ | | 2. Dt. of approval |___|___| |___|___| |___|___|___|___| | | ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ | | 3. Regn.no.allotted |___|___|___|___|___|___|___|___|___|___| | | | \---------------------------------------------------------------/ I Nature of application (Please tick ( _/ ) the appropriate box/boxes) ___ |___| For foreign investment under para 39 B(i) ___ |___| For foreign investment under para 39 B(iv) ___ |___| For foreign technology agreement under para 39 C(i) ___ |___| For foreign technology agreement under para 39 C(iii) II Name and Address of the Applicant / Company in full (BLOCK LETTERS) Name of the ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Applicant/ |___|___|___|___|___|___|___|___|___|___|___|___| Company ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Address |___|___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Pin Code |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Telephone |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Telex |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Fax |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Cable |___|___|___|___|___|___|___|___|___| I EXPLANATION : Items (I) and (II) below should be filled only in respect of an Indian Company which is already in existence. (I) Capital Structure of the existing Indian Company (Amount in Rupees) Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Authorised |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ b) Subscribed |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Paid-up |___|___|___|___|___|___| |___|___|___|___|___| (II) Pattern of share holding in existing paid-up capital (Amount in Rupees) Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Foreign holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| b) Non resident Indian Company / Individual holding Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ i) Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ii)Non-Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Resident Holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| d) Total [a + b (i + ii) + c]: ___ ___ ___ ___ ___ ___ Equity |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Preference |___|___|___|___|___|___| IV (I) Proposed capital structure of the Indian company, in case revision of existing capital structure is contemplated, or if a new company is to be set up. (Amount in Rupees) Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Authorised |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ b) Subscribed |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Paid-up |___|___|___|___|___|___| |___|___|___|___|___| (II) Pattern of share holding in existing paid-up capital (Amount in Rupees) Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Foreign holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| b) Non resident Indian Company / Individual holding Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ i) Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ii)Non-Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Resident Holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| d) Total [a + b (i + ii) + c]: ___ ___ ___ ___ ___ ___ Equity |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Preference |___|___|___|___|___|___| V Rupee equivalent of the proposed foreign equity in the Indian Company (including premium, if any in case of existing companies). ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| VI Rupee equivalent of foreign exchange component in the CIF value of capital goods to be imported, ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| VII Existing Activity(ies) if any, of the Indian Company (sup- plementary sheets may be used if necessary). (a) Item Code [Indian Trade Classification (Harmonised System)] Under Annexure III of the Industrial Policy Statement [Please tick ( _/ ) the appropriate box] ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| Yes |___| No |___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| Yes |___| No |___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| Yes |___| No |___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| Yes |___| No |___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| Yes |___| No |___| (b) Item Description ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| VIII Item(s) of manufacture of activity(ies) proposed to be undertaken with foreign collaboration (in case of more than one item, supplementary sheets may be used). (a) Item Code [Indian Trade Classification (Harmonised System)] ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| (b) Item Description ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| IX Location and full address of the proposed factory, if known. ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Location |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ District |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ State |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Pin Code |___|___|___|___|___|___| X FOREIGN INVESTMENT (a) Financial Collaborator (if the name and address are the same as at item II on page 1, please state so)_)__________________ Name _____________________________________ _____________________________________ Address _____________________________________ _____________________________________ Country _____________________________________ (b) Background of Financial Collaborator. XI FOREIGN TECHNOLOGY AGREEMENT (a) Foreign Technical Collaborator (if the name and address are the same as at item II on page 1, please state so)_______________ Name _____________________________________ _____________________________________ Address _____________________________________ _____________________________________ Country _____________________________________ (b) Background of Financial Collaborator. (c) Royalty on Sales Please tick ( _/ ) whichever is applicable /-------------------------------------\ /---------------------\ | |Percentage | Period | | INCLUSIVE OF TAXES | |------------|-----------|------------| |---------------------| | Domestic | | | | NET OF TAXES | |------------|-----------|------------| \---------------------/ | Export | | | \-------------------------------------/ (d) Nature and quantum of lumpsum payments. Please tick ( _/ ) (Please tick (_/) the appropriate boxes whichever is applicable ___ /---------------------\ |___| Technical know-how fees | INCLUSIVE OF TAXES | |---------------------| ___ | NET OF TAXES | |___| Fees for drawing and designs \---------------------/ ___ |___| Payments for use of Patents, brand names, trade marks and the like ___ |___| Engineering Services' Fees ___ |___| Others (Please Specify) /---------------------------------------------------------------\ | Currency of Payment Amount of foreign No.of | | exchange required installments | \---------------------------------------------------------------/ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| Rupee Equivalent ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| XII (a) In case approval is sought under para 39 c(ii) of the Statement of Industrial Policy dated 24.7.1991, please confirm that the foreign exchange requirement will be met through EXIM scrips. ___ ___ Yes |___| No |___| (b) If no, please indicate the source of foreign exchange XIII Expected date of commencement of commercial production. Date Month Year ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___| |___|___|___| XIV Please mention the name of the Authorised Dealer of Foreign Exchange concerned through whom the remittances of Technical Know-how fees and Royalty will be made. Name ____________________________________________ Address ____________________________________________ ____________________________________________ (In case of change, please notify, the RBI) DECLARATION I/We hereby certify that the above statements are true and correct to the best of my/our knowledge and belief. (Signature of applicant) _______________________________ (Name in block letters) _______________________________ (Designation of the Signatory) ________________________________ Place Date Month Year ___ ___ ___ ___ ___ ___ ___ Date |___|___| |___|___| |___|___|___|
NOTE FOR GUIDANCE OF ENTREPRENEURS FOR FOREIGN INVESTMENT & TECHNOLOGY TRANSFER AGREEMENTS(This note contains information for the guidance of entrepreneurs and may be retained by them, it need not accompany the application). I. EXTRACTS FROM STATEMENT ON INDUSTRIAL POLICY DATED 24TH JULY, 1991 PARAGRAPH 39 B - FOREIGN INVESTMENT i) Approval will be given for direct foreign investment upto 51 percent foreign equity in high priority industries (Annexure III). There shall be no bottlenecks of any kind in this process. Such clearance will be available if foreign equity covers the foreign exchange requirement for imported capital goods. ii) While the import of components, raw materials and intermedi- ate goods, and payment of knowhow fees and royalties will be governed by the general policy applicable to other domestic units, the payment of dividends would be monitored through the Reserve Bank of India so as to ensure that outflows of account of dividend payments are balanced by export earnings over a period of time. iii) Other foreign equity proposals, including proposals involv- ing 51% foreign equity which do not meet the criteria under (i) above, will continue to need prior clearance. Foreign equity proposals need not necessarily be accompanied by foreign technol- ogy agreements. iv) To provide access to international markets, majority foreign equity holding upto 51% equity will be allowed for trading companies primarily engaged in export activities. while the thrust would be on export activities, such trading houses shall be at par with domestic trading and export houses in accordance with the Import-Export Policy. NOTE : While RBI would consider applications falling under iotems (i) and (iv), applications in respect of item (iii) will be considered by Government of India, Ministry of Industries (SIA) PARAGRAPH 39 C - FOREIGN TECHNOLOGY AGREEMENTS i) Automatic permission will be given for foreign technology agreements in high priority industries (Annex III) upto a lumpsum payment of Rs.10 million, 5% royalty for domestic sales and 8% for exports, subject to total payments of 8% of sales over a 10 year period from date of agreement or 7 years from commencement of production. The prescribed royalty rates are net of taxes and will be calculated according to standard procedures. ii) In respect of industries other than those in Annex III, automatic permission will be given subject to the same guidelines as above if no free foreign exchange is required for any pay- ments. iii) All other proposals will need specific approval under the general procedures in force. iv) No permission will be necessary for hiring of foreign technicians, foreign testing of indigenously developed technolo- gies. Payment may be made from blanket permits or free foreign exchange according to RBI guidelines. NOTE : (1) Application in respect of items (i) and (ii) would be con- sidered by RBI. All other proposals should be submitted to Government of India, Ministry of Industry (SIA). (2) In respect of item (ii) foreign exchange requirement is required to be met from Exim Scrips. II. STANDARD CONDITIONS ATTACHED TO APPROVALS FOR FOREIGN INVESTMENT & TECHNOLOGY AGREEMENT. 1. The total non-resident share-holding in the undertaking should not exceed the percentage(s) specified in the approval letter. 2.(a) The royalty will be calculated on the basis of the net ex- factory sale price of the product, exclusive of excise duties, minus the cost of the standard bought-out components and the landed cost of imported components, irrespective of the source of procurement, including ocean freight, insurance, custom duties, etc. The payment of royalty will be restricted to the licensed capacity plus 25% in excess thereof for such items requiring industrial licence or on such capacity as specified in the approval letter. this restriction will not apply to items not requiring industrial licence. In case of production in excess of this quantum, prior approval of Government would have to be obtained regarding the terms of payment of royalty in respect of such excess production. (b) The royalty would be payable beyond the period of the agree- ment if the orders had not been executed during the period of agreement. However, where the orders themselves took a long time to execute, then the royalty for an order booked during the period of the agreement, but executed after the period of agreement, would be payable only after a Chartered Accountant certifies that the orders in fact have been firmly booked and execution began during the period of agreement, and the technical assistance was available on a continuing basis even after the period of agreement. (c) No minimum guaranteed royalty would be allowed. The lumpsum shall be paid in three installments as detailed below, unless otherwise stipulated in the approval letter:- First 1/3rd after the approval for collaboration proposal is obtained from Reserve Bank of India and collaboration agreement is filed with the Authorised dealer in Foreign Exchange. Second 1/3rd on delivery of know-how documentation. Third and final 1/3rd on commencement of commercial production, or four years after the proposal is approved by Reserve Bank of India and agreement is filed with the Authorised Dealer in Foreign Exchange, whichever is earlier. The lumpsum can be paid in more than three installments, subject to completion of the activities as specified above. 4. Al remittances to the foreign collaborator shall be made as per the exchange rates prevailing on the date or remittance. 5. The applications for remittances may be made to the Autho- rised Dealer in Form A2 with the undernoted documents :- (a) A "No objection" Certificate issued by the Income Tax authorities in the standard form or a copy of the certificated issued by the designated bank regarding the payment of tax where the tax has been paid at a flat rate of 30% to the designated bank. (b) A certificate from the Chartered Accountant in Form (RCK/TCR (depending upon the purpose of payment). (c) A declaration by the applicant to the effect that the pro- posed remittance is strictly in accordance with the terms and conditions of the collaboration approved by RBI/Government. 6. The agreement shall be subject to Indian Laws. 7. A copy of the foreign investment and technology transfer agreement signed by both the parties may be furnished to the following authorities:- a) Administrative Ministry/Department b) Department of Scientific and Industrial Research New Delhi. c) Concerned Regional Office of Exchange Control Department, RBI. d) Authorised Dealer designated to service the agreement. 8. All payments under the foreign investment and technology transfer agreement including rupee payments (if any) to be made in connection with engagement/deputation of foreign technical personnel such as passage fare, living expenses etc. of foreign technicians, would be liable for the levy of cess under the Research and Development Cess Act, 1986 and the Indian Company while making such payments should pay the cess prescribed under the Act. 9. A return (in duplicate) in Form TCD should be submitted to Regional Office of the Reserve Bank of India in the first fort- night of January each year. III. HIRING OF FOREIGN TECHNICIANS : No permission is necessary for hiring of foreign technicians and no application need be made to Government for this purpose irrespective of whether the hiring of foreign tech- nicians is under an approved collaboration agreement or not. As regard release of foreign exchange either against blanket permits or in free foreign exchange, the Reserve Bank of India/Authorised Dealers may be approached, as per RBI guidelines. For hiring foreign technicians beyond a period of three months, clearance of the Ministry of Home Affairs will be re- quired. IV. DEPUTATION OF INDIAN PERSONNEL FOR TRAINING ABROAD : For deputing Indian personnel for training and other purpose abroad, the entrepreneur may approach only the RBI/Authorised Dealers as per RBI guidelines. V. FOREIGN TESTING OF INDIGENOUS RAW MATERIALS & PRODUCTS AND INDIGENOUSLY DEVELOPED TECHNOLOGY. Entrepreneurs may approach RBI/Authorised Dealers for autho- rising payments either against blanket permits or in free foreign exchange, as per RBI guidelines. VI. NEW CLASSIFICATION SYSTEM: Entrepreneurs may not that the description of article(s) to be manufactured should be stated according to the Indian Trade Classification System. Copies of the Indian Trade Classification (based on Harmo- nised Commodity Description and Coding System), published by the Ministry of Commerce, Directorate General of Commercial Intelli- gence and Statistics, Calcutta, can be obtained on payment from the Controller of Publications, 1, Civil Lines, Delhi 110 054 or from any of the agents authorised to sell Government of India Publications. N.B.: UPDATED ON JUNE 1, 1992.
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FORM FC (SIA) APPLICATION FOR FOREIGN INVESTMENT & TECHNOLOGY AGREEMENT i) All applications for permission under paragraphs 39 B(iii), 39 C(iii) of the Statement of Industrial Policy (July 1991) are to be submitted to the Secretariat for Industrial Approvals, Ministry of Industry (Department of Industrial Development), Udyog Bhavan, New Delhi110 011 (in 10 copies). One application along with 9 photocopies would be acceptable. ii) Entrepreneurs may go through the "Note For Guidance of Entrepreneurs For Foreign Investment and Technology Agreement" (attached to this form) carefully before filling up the details in the form. The Note contains relevant extracts of the State- ment of Industrial Policy, standard conditions attached to ap- provals for foreign investment/foreign technology agreements, procedure for hiring foreign technicians, foreign testing of indigenous raw materials and products and indigenously developed technology, deputation of Indian technicians abroad and a note on Indian Trade Classification (Harmonised System) and guidelines for filling up the Form FC (SIA). /---------------------------------------------------------------\ | (for office use only) | | ___ ___ ___ ___ ___ ___ ___ ___ | | 1. Date of receipt |___|___| |___|___| |___|___|___|___| | | ___ ___ ___ ___ ___ ___ ___ ___ | | 2. Date. of approval |___|___| |___|___| |___|___|___|___| | | ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ | | 3. Registration |___|___|___|___|___|___|___|___|___|___| | | Number allotted | \---------------------------------------------------------------/ I Nature of application (Please tick ( _/ ) the appropriate box/boxes) ___ |___| For foreign investment under para 39 B(iii) ___ |___| For foreign technology agreement under para 39 C(iii) II Name and Address of the Promoter / Industrial Undertaking (Indian/Foreign) in full (BLOCK LETTERS) Name of the ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Promoter / |___|___|___|___|___|___|___|___|___|___|___|___| Indl. ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Undertaking |___|___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Postal |___|___|___|___|___|___|___|___|___|___|___|___| Address ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Pin Code |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Telephone |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Telex |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Fax |___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ Cable |___|___|___|___|___|___|___|___|___| (III) Capital Structure of the existing Indian Company (Amount in Rupees) Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Authorised |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ b) Subscribed |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Paid-up |___|___|___|___|___|___| |___|___|___|___|___| (II) Pattern of share holding in existing paid-up capital (Amount in Rupees) Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Foreign holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| b) Non resident Indian Company / Individual holding Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ i) Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ii)Non-Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Resident Holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| d) Total [a + b (i + ii) + c]: ___ ___ ___ ___ ___ ___ Equity |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Preference |___|___|___|___|___|___| IV (I) Proposed capital structure of the Indian company, in case revision of existing capital structure is contemplated, or if a new company is to be set up. (Amount in Rupees) Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Authorised |___|___|___|___|___|___| |___|___|___|___|___| Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ b) Subscribed |___|___|___|___|___|___| |___|___|___|___|___| Equity Preference ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Paid-up |___|___|___|___|___|___| |___|___|___|___|___| (II) Pattern of share holding in existing paid-up capital (Amount in Rupees) Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) Foreign holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| b) Non resident Indian Company / Individual holding Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ i) Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ii)Non-Repatriable |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| Equity Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ c) Resident Holding |___|___|___|___|___|___| |___|___|___|___| Preference Percentage ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___| d) Total [a + b (i + ii) + c]: ___ ___ ___ ___ ___ ___ Equity |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Preference |___|___|___|___|___|___| VI Items of manufacture of activities proposed to be undertaken with foreign collaboration (supplementary sheets may be used if necessary) (a) Item Code [Indian Trade Classification (Harmonised System)] ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___| (b) Item Description ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ (c) Proposed Annual Capacity |___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ (d) Unit of capacity (Tonnes/ |___|___|___|___|___|___|___| Numbers/Meters/any others) VII Location of the Factory ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Location & |___|___|___|___|___|___|___|___|___|___|___| Address ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ District |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ State |___|___|___|___|___|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Pin Code |___|___|___|___|___|___| VIII Investment in Plant & Machinery (in Rupees) ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ (i) Indigenous |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ (ii) Imported |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ a) CIF Value |___|___|___|___|___|___| |___|___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ b) Landed Cost |___|___|___|___|___|___| |___|___|___|___|___| iii) Total ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ [(i) + (ii)(b)] |___|___|___|___|___|___| |___|___|___|___|___| IX. Estimated annual requirement of imported raw materials at full production: ---------------------------------------------------------------- Value (in Rupees) Estimated ex-factory Percentage in re- (CIF) Value of turnover lation to ex-fac- tory value of turnover ---------------------------------------------------------------- ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___| |___|___|___|___|___| |___|___|___|___| X Estimated annual requirement of imported components ---------------------------------------------------------------- Year Value (in Rupees) Estimated ex-factory Percentage in re- (CIF) Value of turnover lation to ex-fac- tory value of turnover ---------------------------------------------------------------- ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 1st |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 2nd |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 3rd |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 4th |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 5th |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 6th |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 7th |___|___|___|___| |___|___|___|___|___| |___|___|___|___| ---------------------------------------------------------------- Note : Please attach list of components to be imported XI FOREIGN INVESTMENT (a) Financial Collaborator Name _____________________________________ Address _____________________________________ Country _____________________________________ (b) Amount of foreign equity investment Amount in Rupees Percentage of paid-up capital ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___|___| |___|___|___|___| XII FOREIGN TECHNOLOGY AGREEMENT (a) Technical Collaborator Name _____________________________________ Address _____________________________________ Country _____________________________________ (b) Royalty on Sales Please tick ( _/ ) whichever is applicable /-------------------------------------\ /---------------------\ | Sales |Percentage | Period | |Please tick (_/)which| | | of Sales | | | ever is applicable | |------------|-----------|------------| |---------------------| | Domestic | | | | INCLUSIVE OF TAXES | |------------|-----------|------------| |---------------------| | Export | | | | NET OF TAXES | \-------------------------------------/ \---------------------/ (c) Nature of quantum of Lumpsum payment /---------------------\ |Please tick (_/)which| | ever is applicable | |---------------------| | INCLUSIVE OF TAXES | |---------------------| | NET OF TAXES | \---------------------/ /---------------------------------------------------------------\ | Foreign Currency Amount of foreign No.of | | exchange required installments | \---------------------------------------------------------------/ i) Technical Know-how fees ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| ii) Payment for design/drawings ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| iii) Payment for engineering services ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| iv) Payment for use of patents, brand names trade marks and the like ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| v) Any other payment (please specify the purpose) ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___|___|___| |___|___|___|___|___| |___|___| XIII Please indicate in brief : (i) The background of the collaborator : (ii) Technical specification/model - numbers of the items of manufacture/activity covered by the scope of the proposed collab- oration (Please attach product catalogues, if available); (iii) Whether you have had a foreign collaboration earlier for the same or similar product. (iv) Whether the foreign collaborator has collaborations with any other party in India for the same or similar products if so, please furnish details. XIV a) Export commitments/obligation which the applicant is prepared to under take ___ ___ ___ ___ ___ ___ ___ Item Code |___|___|___|___|___|___|___| ----------------------------------------------------------------- Years Units(Tonnes/Numbers/ Quantity Percentage FOB Value meters/any others) of Production in Rupees (1) (2) (3) (4) (5) ----------------------------------------------------------------- 1st ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___|___| |___|___|___| |___|___| |___|___| 2nd ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___|___| |___|___|___| |___|___| |___|___| 3rd ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___|___| |___|___|___| |___|___| |___|___| 4th ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___|___| |___|___|___| |___|___| |___|___| 5th etc. ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___|___| |___|___|___| |___|___| |___|___| --------------------------------------------------------------- Please indicate details of buy back arrangement, if any. XV If this application is for existing collaboration agreement or renewal of the already expired collaboration agreement : (a) Please indicate the period for which the agreement has al- ready run and attach the copy of the previous approval. No. & date of Date of commencement Date of expiry of Govt.approval of agreement agreement Date Month Year Date Month Year _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |_|_|_|_|_|_|_|_| |_|_| |_|_| |_|_|_|_| |_|_| |_|_| |_|_|_|_| Date Month Year _ _ _ _ _ _ _ _ |_|_||_|_||_|_|_|_| (b) Justification for extension of the collaboration agreement with information about the status of absorption, adaptation and development of the technology already achieved. (c) (i) Whether you have set up any R & D Cell to absorb the know-how and the progress achieved in this regard. ___ ___ Yes |___| No |___| (ii) If yes, please indicate the number and date of communication under which recognised by Department of Science & Technology/Department of Scientific and Industrial Research. ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ |___|___|___|___| |___|___|___|___|___|___| (iii) Expenditure on R & D facility set up (in Rupees) ___ ___ ___ ___ ___ ___ Amount of investment in fixed assets |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ Annual recurring expenditure |___|___|___|___|___|___| (d) Total payments made so far (Net of taxes) (in Rupees) ___ ___ ___ ___ ___ ___ a) Lumpsum |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ b) Royalty |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ c) Other payments, if any |___|___|___|___|___|___| XVI (I) Total Foreign Exchange inflow during the period of pro- posed collaboration. Rupee Equivalent i) Foreign Exchange earnings based ___ ___ ___ ___ ___ ___ on F.O.B.value of export |___|___|___|___|___|___| obligation/commitment ii) Foreign Exchange savings (c.i.f) ___ ___ ___ ___ ___ ___ anticipated as a result of |___|___|___|___|___|___| import substitution. ___ ___ ___ ___ ___ ___ iii)Total |___|___|___|___|___|___| (II) Total Foreign Exchange outgo during the period of Collaboration ___ ___ ___ ___ ___ ___ i) Import of machinery and equipment |___|___|___|___|___|___| (c.i.f) ___ ___ ___ ___ ___ ___ ii) Import of raw materials (c.i.f) |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ iii) Import of components (c.i.f) |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ iv) Dividends & Profits (net of taxes)|___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ v) Lumpsum payments (net of taxes) |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ vi) Royalty payments (net taxes) |___|___|___|___|___|___| ___ ___ ___ ___ ___ ___ TOTAL |___|___|___|___|___|___| XVII Expected date of commencement of commercial production. Date Month Year ___ ___ ___ ___ ___ ___ ___ |___|___| |___|___| |___|___|___| XVIII Please indicate : a) the Regional Office of the RBI to whom a copy of the approval is to be endorsed ----------------------------------------- ----------------------------------------- b) the name of the Authorised Dealer of Foreign Exchange con- cerned through whom the remittance of Technical know-how and Royalty will be made. Name ----------------------------------------- Address ----------------------------------------- DECLARATION I/We hereby certify that the above statements are true and cor- rect to the best of my/our knowledge and belief. (Signature of applicant) ---------------------------------- (Name in Block Letters) ---------------------------------- (Designation of the ---------------------------------- Signatory) Place ___ ___ ___ ___ ___ ___ ___ Date |___|___| |___|___| |___|___|___| Date Month Year Note for guidance of Entrepreneurs for Foreign Investment and Technology Agreements (This part contains information for the guidance of entrepreneurs and may be retained by them; it need not accompany the applica- tion) 1. Extracts from Statement on Industrial Policy dated 24th, 1991 Para 39 B FOREIGN INVESTMENT i) Approval will be given for direct foreign investment upto 51 percent foreign equity in high priority industries (Annex III). There shall be no bottlenecks of nay kind in this process. Such clearance will be available if foreign equity covers the foreign exchange requirement for imported capital goods. consequential amendments to the Foreign Exchange Regulation Act (1973) shall be carried out. ii) While the import of components, raw materials and intermedi- ate goods, and payment of know-how fees and royalties will be governed by the general policy applicable to other domestic units the payment of dividends would be monitored through the Reserve Bank of India so as to ensure that outflows on account of divi- dend payments are balanced by export earnings over a period of time. iii) Other foreign equity proposals, including proposals involv- ing 51% foreign equity which do not meet the criteria under (i) above, will continue to need prior clearance. Foreign equity proposals need not necessarily be accompanied by foreign technol- ogy agreements. iv) To provide access to international markets, majority foreign equity holding upto 51 per cent equity will be allowed for trad- ing companies primarily engaged in export activities. While the thrust would be on export activities, such trading houses shall be at par with domestic trading and export houses in accordance with the Import-Export Policy. Para 39 C FOREIGN TECHNOLOGY AGREEMENTS. i) Automatic permission will be given for foreign technology agreements in high priority industries (Annex III) upto a lumpsum payment of Rs.10 million. 5% royalty for domestic sales and 8% for exports, subject to total payments of 8% of sales over a 10 year period from date of agreement or 7 years from commencement of production. The prescribed royalty rates are net of taxes and will be calculated according to standard procedures. ii) In respect of industries other than those in Annex III, automatic permission will be given subject to the same guidelines as above if so free foreign exchange is required for any pay- ments. iii) All other proposals will meet specific approval under the general procedures in force. iv) No permission will be necessary for hiring of foreign techni- cians, foreign testing of indigenously developed technologies. Payment may be made from blanket permits or free foreign exchange according to RBI guidelines. II Standard Conditions Attached to Approvals for Foreign Investment Technology Agreement 1. The total non-resident share-holding in the undertaking should not exceed the percentage(s) specified in the approval letter. In case of any change in the amount of foreign/NRI investment, or the paid-up capital, an intimation to this effect may be given to SIA, RBI and the Administrative Ministry, subject to the percentage of foreign/NRI share-holding remaining un- charged. 2. (a) The royalty will be calculated on the basis of the net ex-factory sale price of the product, exclusive of excise duties, minus the cost of the standard broughtout components and the landed cost of imported components, irrespective of the source of procurement, including ocean freight, insurance, custom duties, etc. The payment of royalty will be restricted to the licensed capacity plus 25% in excess there of for such items requiring industrial licence or on such capacity as specified in the approval letter. This restriction will not apply to items not requiring industrial licence. In case of production in excess of this quantum, prior approval of Government would have to be obtained regarding the terms of payment of royalty in respect of such excess production. (b) The royalty would not be payable beyond the period of the agreement if the orders had not been executed during the period of agreement. However, where the orders themselves took a long time to execute, then the royalty for an order booked during the period of the agreement, but executed after the period agreement, would be payable only after a Chartered Accountant certifies that the orders in fact have been firmly booked and execution began during the period of agreement, and the technical assistance was available on a continuing basis even after the period of the agreement. (c) No minimum guaranteed royalty would be allowed. 3. The lumpsum shall be paid in three installments as detailed below, unless otherwise stipulated in the approval letter:- First 1/3rd after the agreement is filled with Reserve Bank of India/Authorised Foreign Exchange Dealer. Second 1/3rd on delivery of technical documentation Third and final 1/3rd on commencement of commercial production, or four years after the agreement is filed with Reserve Bank of India/Authorised Foreign Exchange Dealer, whichever is earlier. The lumpsum can be paid in more than three installments, subject to completion of the activities as specified above. 4. All remittances to the foreign collaborator shall be made as per the exchange rates prevailing on the date of remittance. 5. For undertaking the export obligation, if any, specified in the approval letter, the requisite guarantee, i.e. legal under- taking/bank guarantee, as may be required, should be furnished according, to the detailed instructions issued by the Chief Controller of Imports & Exports (E.O.Cell), Ministry of Commerce (EP) and the Administrative Ministry, who may be contacted in the matter. 6. Import of capital equipment, components and raw materials will be allowed as per the import policy prevailing from time to time and will be further subject to the condition that no tied purchase of equipment, components and raw materials from the collaborator will be allowed. 7. The agreement shall be subject to Indian Laws. 8. A copy of the collaboration agreement signed by both the parties may be furnished to the following authorities : a) Administrative Ministry/Department b) Secretariat for Industrial Approvals, (Foreign Collaboration- II Section) Department of Industrial Development, Udyog Bhavan, New Delhi 110 001. c) Department of Scientific and Industrial Research, Technology Bhavan, New Mehrauli Road New Delhi- 110 016 III. HIRING OF FOREIGN TECHNICIANS: No permission is necessary for hiring of foreign technicians and no application need be made to Government for this purpose irre- spective of whether the hiring of foreign technicians is under an approved collaboration agreement or not as regards release of foreign exchange either against blanket permits or in free for- eign exchange, the Reserve Bank of India/Authorised Dealers may be approached, as per RBI guidelines. IV DEPUTATION OF INDIAN PERSONNEL FOR TRAINING ABROAD : For deputing Indian personnel for training and other purposes abroad, the entrepreneurs, may approach only the RBI/Authorised Dealers as per RBI guidelines. V FOREIGN TESTING OF INDIGENOUS RAW MATERIALS AND PRODUCTS AND INDIGENOUSLY DEVELOPED TECHNOLOGY Entrepreneurs may approach RBI/Authorised Dealers for authorising payments either against blanket permits or in free exchange, as per RBI guidelines. VI NEW CLASSIFICATION SYSTEM Entrepreneurs may note that the description of article(s) to be manufactured should be stated according to the Indian Trade Classification Systems. Copies of the Indian Trade Classification (based on Harmonised Commodity Description and Coding System), published by the Ministry of Commerce, Directorate General of Commercial Intelligence and Statistics, Calcutta, can be obtained on pay- ment form the controller of Publication, 1 Civil Lines, Delhi 110 054 or from any of the agents authorised to sell Government of Indian Publications. N.B.: UPDATED ON JUNE 1, 1992.
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