Section 22(2) in The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004
(2)[ A person resident in India, being an individual, who is an employee or a director of Indian office or branch of a foreign entity or of a subsidiary in India of a foreign entity or of an Indian company in which foreign entity has direct or indirect equity holding, may accept the shares offered by such foreign entity provided that:(i)the shares under the ESOP Scheme are offered by the issuing company globally on uniform basis, and(ii)an Annual Return is submitted by the Indian company to the Reserve Bank through the Authorised Dealer bank giving details of remittances! beneficiaries etc.Explanation: - For the purpose of this sub-regulation, 'indirect' means 'indirect foreign equity holding through a trust/special purpose vehicle/a step down subsidiary'.]
