The DIPP has released a discussion paper on the subject of "Issue of shares For Consideration Other Than Cash" with specific reference to Foreign Direct Investment. The paper has considered the following issues:
- issue of shares against import of capital goods, machinery or equipment including second hand equipment
- issue of shares against services
- issue of shares against import of raw materials and trade payables.
- issue of shares against pre-operative or pre-incorporation expenses.
- share swaps
- issue of shares against intangible assets including franchisee agreements
- issue of shares against one time extraordinary payment including arbitral awards
The discussion paper has also outlined some specific issues that may arise in this regard.
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