GUIDELINES FOR INDIAN DIRECT INVESTMENT IN JOINT VENTURES AND WHOLLY OWNED SUBSIDIARIES ABROAD

DEFINITIONS

For purposes of these guidelines:

(a) "direct investment" shall mean investment by an Indian party in the equity share capital of a foreign concern with a view to acquiring a long term interest in that concern. Besides the equity stake, such long term interest may be reflected through representation on the Board of Directors of the foreign concern and in the supply of technical know-how, capital goods, components, raw materials, etc. and managerial personnel to the foreign concern.

(b) "Host Country" shall mean the country in which the foreign concern receiving the direct investment is formed, registered or incorporated.

(c) "Indian party" shall mean a private or public limited company incorporated in accordance with the laws of India. When more than one Indian body corporate make a direct investment in a foreign concern, all the bodies corporate shall together constitute the "Indian party".

(d) "Joint Venture" shall mean a foreign concern formed, registered or incorporated in accordance with the laws and regulations of the host country in which the Indian party makes a direct investment, whether such investment amounts to a majority or minority shareholding.

(e) "Wholly Owned Subsidiary" shall mean a foreign concern formed, registered or incorporated in accordance with the laws and regulations of the host country whose entire equity share capital is owned by the Indian party.

Guidelines for Indian Direct Investment in Joint Ventures and Wholly Owned Subsidiaries Abroad

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