Section 7(3) in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017
(3)Issue of "employee's stock option"/ "sweat equity shares" in a company where investment by a person resident outside India is under the approval route shall require prior Government approval. Issue of "employee's stock option"/ "sweat equity shares" to a citizen of Bangladesh/ Pakistan shall require prior Government approval.Provided an individual who is a person resident outside India exercising an option which was issued when he/ she was a person resident in India shall hold the shares so acquired on exercising the option on a non-repatriation basis.
