Q98
Money received for purchase of shares in Indian company by a foreign investor will be treated as foreign direct investment if
A.
The investment is in equity shares
B.
The shares are allotted directly to him by the company
C.
The investor has an intention to take active role in the management of the company
D.
The shares are acquired other than through stock exchange
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Money received for purchase of shares in Indian company by a foreign investor will be treated as foreign direct investment if the shares are acquired other than through stock exchange. NRIs are also allowed to contribute to capital of Indian companies by investing in shares on Recognized Stock Exchanges under Portfolio Investment Route.