RBI Eases Regulations For Startups To Drive Growth

To drive growth in startup ecosystem, RBI has announced few initiatives which will ease business norms and drive growth in the ecosystem. Few initiatives taken by RBI are:

Startups will be enabled to receive foreign venture capital investment and also explicitly and can also transfer shares from Foreign Venture Capital Investors to other residents or non-residents.

In case of a transfer of ownership of a startup, RBI will permit receipt of the deal value on a deferred basis. Depending on nature of remittance, it will also let startups to sumbit A2 forms online for outward remittances.

In addition to these, startups can access rupee loans under External Commercial Borrowing (ECB) framework with relaxations. It will also allow startups to issue FDI instruments like convertible notes to foreigners.

The Reserve Bank has created a dedicated mailbox to provide assistance and guidance to the startup sector. Further, electronic reporting of investment and subsequent transactions will be made on e-Biz platform only. Submission of physical forms will be discontinued with effect from February 8, 2016.

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