Section 14(1) in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017
(1)For the purpose of this regulation:(a)'Ownership of an Indian company' shall mean beneficial holding of more than 50 percent of the capital instruments of such company. 'Ownership of an LLP' shall mean contribution of more than 50 percent in its capital and having majority profit share.(b)'Company owned by resident Indian citizens' shall mean an Indian company where ownership is vested in resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens. An 'LLP owned by resident Indian citizens' shall mean an LLP where ownership is vested in resident Indian citizens and/ or Indian entities, which are ultimately owned and controlled by resident Indian citizens.(c)'Company owned by persons resident outside India' shall mean an Indian company that is owned by persons resident outside India. An 'LLP owned by persons resident outside India' shall mean an LLP that is owned by persons resident outside India.(d)'Control' shall mean the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreement or voting agreement. For the purpose of LLP, 'Control' shall mean the right to appoint majority of the designated partners, where such designated partners, with specific exclusion to others, have control over all the policies of an LLP.(e)'Company controlled by resident Indian citizens' means an Indian company, the control of which is vested in resident Indian citizens and/ or Indian companies which are ultimately owned and controlled by resident Indian citizens. An 'LLP controlled by resident Indian citizens' shall mean an LLP, the control of which is vested in resident Indian citizens and/ or Indian entities, which are ultimately owned and controlled by resident Indian citizens.(f)'Company controlled by persons resident outside India' shall mean an Indian company that is controlled by persons resident outside India. An 'LLP controlled by persons resident outside India' shall mean an LLP that is controlled by persons resident outside India.(g)'Downstream Investment' shall mean investment made by an Indian entity or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity:(h)'Holding Company' shall have the same meaning as assigned to it under Companies Act, 2013;(i)'Indirect Foreign Investment' means downstream investment received by an Indian entity from:(i)another Indian entity (IE) which has received foreign investment and (i) the IE is not owned and not controlled by resident Indian citizens or (ii) is owned or controlled by persons resident outside India; or(ii)an investment vehicle whose sponsor or manager or investment manager (i) is not owned and not controlled by resident Indian citizens or (ii) is owned or controlled by persons resident outside IndiaProvided no person resident in India other than an Indian entity can receive Indirect Foreign Investment.(j)'Total Foreign Investment' means the total of foreign investment and indirect foreign investment and the same will be reckoned on a fully diluted basis;(k)'Strategic downstream investment' means investment by banking companies incorporated in India in their subsidiaries, joint ventures and associates.
