Transfer Of Shares Between Resident And Non-Resident (from India) involves paying the mind (buyer to seller) and executing the transfer of shares. The bond shall be duly stamped at 0.25% of the study amount. When the transaction is between a resident and a non-resident, there are regulations regarding internal and external transfer of funds, stock valuation, and submission of the FC-TRS form on the company’s electronic portal. Reserve Bank of India (RBI) through Federal Notice No. 20 (R) / 2017-RB dated 07 November 2017, the Foreign Exchange Administration (Transfer or Security issuance by a resident outside India) has made regulations, 2017 to regulate investment in India by person Resident outside India.
FORM FOREIGN CURRENCY-TRANSFER OF SHARES (FC-TRS):
The FC-TRS Form for the Transfer of Capital Sukuk (Shares, Fully Convertible and Mandatory Securities) must be submitted to an Indian Company in the following cases:
1. When the transfer is made between a person residing outside India (returnable basis) and a person residing outside India (non-returnable basis)
2. When the transfer is made between a person residing outside India (a returnable basis) and a person residing in India.
Who is the FC-TRS form file?
The transfer of capital instruments stated above is reported upon receipt of each payment. One of the important dilemmas among the general public is who has to present this form with an authorized bank agent?
The burden of reporting the resident/transferee or person residing outside India is borne by capital instruments on a non-returnable basis, as the case may be. Transfer Of Shares Between Resident And Non-Resident
What is the Time Limit for filing FC-TRS?
The form of the bank of the authorized agent shall be deposited within 60 days from the transfer of capital instruments or the receipt/transfer of funds, whichever is earlier.
What are the procedures for filing applications?
The following steps are included in the FC-TRS form deposit:
1. Execution of the share transfer bill and payment of stamp duty: The parties shall implement the following documents for the transfer of their shares:
• Stock transfer bond according to each SH-4
• Duly signed letters of approval from buyers and sellers.
Note: During the execution of the act of transferring the share, stamp duty @ 0.25% on the amount of consideration is to be paid by buying the transfer of stock stamps, and to see those on SH-4 and then cross the same.
2. Money Transfer: Money must be transferred through appropriate banking channels. A copy of the FIRC and a copy from the customer of the person residing outside India must be obtained from the bank of the authorized agent.
3. Registration on the Biz Portal: It is mandatory to register the details of the person’s form with his / her digital signatures (DSC) on the Biz Portal.
4. Filing the form on the Biz Portal with the required attachments: The online form is filled on the Biz Portal along with the name of the attachments listed below. The photo of the person concerned shall be posted at the time of submitting the application.
5. Audit of Bank Advertising: Mail Submission Form on the e-portal portal, Bank Advertising Audit of each application and they may send the form for resubmission if any documents/information is incorrect or missing.
6. Penal Letter / Certificate issued by the advertising bank: The advertising bank provides you with a letter or a criminal certificate if all the documents and information satisfactory to them. These are documentary evidence that states that FDI compliance is duly taken care of by the applicant.
7. the record by the Indian company: The penalty letter/certificate issued by AD bank is attached with the share transfer form and share certificate and submitted to the company so that the company can take the transfer on its record.
An additional step may be needed in the late submission of FC-TRS: In case the applicant fails to submit FC-TRS within 60 days of the transfer, then the advertising bank will forward the application to the RBI for approval. Transfer Of Shares Between Resident And Non-Resident
Are there any legal fees to deposit FC-TRS?
There is no upfront (e.g. MCA portal) legal fee for depositing FC-TRS on an electronic biz portal, but AD Bank may charge it for processing FC-TRS. Processing fees may vary from bank to bank. The bank may request permission from the depositor to deduct bank charges from the account.
What attachments will be deposited with the FC-TRS form on the Biz Portal?
An FC-TRS form is an online form that is filled out and filed through the Biz Portal along with the following important documents:
1. Letter of approval from buyer and seller.
2. A copy of FIRC in foreign remittances is received by the resident Indian.
3. A copy of the buyer’s client (NRI) on the bank letterhead.
4. An evaluation report from the accredited resident who attests to the value of the shares.
Is there any specific way to evaluate stocks?
The share price is determined on the basis of valuation of shares according to any internationally accepted pricing methodology for valuation based on arm length duly certified by a chartered accountant or a registered dealer bank SEBI or the cost of practicing an accountant.
• While transferring shares from residents to non-residents, the minimum bar is set to price. The price cannot be lower than the price specified in the evaluation report.
• In the case of transferring shares from non-residents to the resident investor, the maximum price is set. The price cannot be more than the price specified in the evaluation report.
Provisions Related to the Transfer of Shares to Non-Residents

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