A S BANKA ADVISORS

? FDI Routes & Structuring for Startups: What Founders Need to Know

Foreign investors interested in your startup?

Understanding FDI entry routes is not optional — it’s strategic.

✅ FDI Routes under FEMA:

1️⃣ Automatic Route

✔️ No prior approval required

✔️ Common in sectors like SaaS, Manufacturing, Edtech

2️⃣ Approval Route

✔️ Requires prior approval from the Government or RBI

✔️ Applicable to sectors such as Broadcasting, Print Media, Multi-Brand Retail

? Structuring Tip for Founders & CFOs

Use only permitted instruments:

✅ Equity Shares

✅ Compulsorily Convertible Preference Shares (CCPS)

✅ Compulsorily Convertible Debentures (CCDs) (with conditions)

⚠️ Compliance Alert:

Shares must be allotted within 60 days of inward remittance — failure to do so attracts FEMA violations and penalties.

? Mail us at [email protected] if you have any query regarding FDI Compliance under RBI FEMA Regulations.

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