Transfer of Shares to Foreign Citizens
Transferring shares to foreign citizens in India involves specific regulations and procedures to ensure compliance with the Foreign Exchange Management Act (FEMA) and the Companies Act, 2013. Here's a breakdown of the key steps and considerations:
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What Is Transfer of Shares?
Shares can be easily transferred from a shareholder to any person (a new or existing shareholder). Shares are transferred through a way of sale or gifting. Usually, the shares are transferred to introduce a new shareholder in a company.
Process of Transfering Shares from Indian to Foreign Citizens
Step 1: Share Documents and Requirements
Share your requirements and the list of documents mentioned below.
Step 2: Receive duly executed transfer form (SH-4)
SH-4 will be received along with the original share certificate within sixty days from the date of execution.
Step 3: Passing the board resolution
A resolution would be passed to brief out about details.
Step 4: Share the signed document
Step 5: Filing of FC – TRS with RBI
Step 6: Approval of FC – TRS
If everything fits fine RBI would provide their approval.
Step 7: Wazzeer provides a new share certificate
Wazzeer would then issue a new share certificate
Step 8: Sharing deliverables
We will share the duly stamped Share Transfer Form (SH-4), New Share Certificates Resolution, and FC-TRS Form and acknowledgment.
Documents Required for Share Transfer
- Original Share Certificates of Transferor
- Copy of FIRC
Key Deliverables
- Duly stamped Share Transfer Form (SH-4)
- New Share Certificates
- Resolution
- FC- TRS Form and Acknowledgement
Why choose Wazzeer?
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One platform for all your requirements
Incorporation is just the first step. Wazzeer supports you throughout your journey as an entrepreneur. Log in to get things done efficiently. A dedicated Account Manager offers the required human touch and acts as an advisor to you.
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Experienced professionals
Our professionals have at least 5 years of experience and have incorporated thousands of companies among them. The rich experience ensures that the process is smooth and right in the first go.
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Defined process
Over the last few years, doing over 500 incorporations, we have defined every step of the process. A virtual process is in place enabling us to deliver hassle free experience for you.
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Cost Effective
You pay what you see in the proposal. No surprises or hidden charges.
Frequently Asked Questions
We incorporated a company but we do not have a share certificate, how can we transfer shares of my company?
In order to transfer shares of a company, it is necessary to have share certificates. If your company has not issued share certificates, you must first issue them to the shareholders. Once the share certificates are issued, the transfer of shares can take place through a share transfer deed. The share transfer deed must be executed by both the transferor and the transferee, and it must be stamped and registered with the Registrar of Companies.
The shares being held by a non-Indian Shareholder are being transferred to another Non-Indian shareholder. Is there any other filing/compliance that is needed?
Yes, if shares held by a non-Indian shareholder are being transferred to another non-Indian shareholder, there are some filings and compliance requirements that need to be met. The transfer must be reported to the Reserve Bank of India within 60 days of the transfer, using the prescribed form. Additionally, the company must ensure compliance with all relevant provisions of the Foreign Exchange Management Act, 1999, and any other applicable laws and regulations.
The shares being held by a non-Indian Shareholder are being transferred to an Indian shareholder. Is there any other filing/compliance that is needed?
Yes, if shares held by a non-Indian shareholder are being transferred to an Indian shareholder, there are some filings and compliance requirements that need to be met. The transfer must be reported to the Reserve Bank of India within 30 days of the transfer, using the prescribed form. Additionally, the company must ensure compliance with all relevant provisions of the Foreign Exchange Management Act, 1999, and any other applicable laws and regulations. The Indian shareholder must also ensure compliance with the Income Tax Act, 1961, and pay any applicable taxes.
The shares being held by an Indian Shareholder are being transferred to a Non-Indian shareholder. Is there any other filing/compliance that is needed?
Yes, if shares held by an Indian shareholder are being transferred to a non-Indian shareholder, there are some filings and compliance requirements that need to be met. The transfer must be reported to the Reserve Bank of India within 60 days of the transfer, using the prescribed form. Additionally, the company must ensure compliance with all relevant provisions of the Foreign Exchange Management Act, 1999, and any other applicable laws and regulations. The non-Indian shareholder must also obtain any necessary approvals and comply with any other requirements under Indian laws.
In the case of transfer of shares is there any Tax that is liable?
Yes, in the case of transfer of shares, there may be tax liabilities depending on the nature of the transfer and the applicable tax laws. If the shares are held for a period of less than 12 months, the transfer may attract short-term capital gains tax, which is calculated based on the difference between the sale price and the cost of acquisition. If the shares are held for more than 12 months, long-term capital gains tax may apply, which is calculated at a lower rate. The tax liability may vary depending on the type of share and the residency status of the buyer and the seller.