Valuation Under FEMA/FDI
With the higher occurrence of FDI transactions, the requirement of Valuation under FEMA is also increasing. As per RBI guidelines, the allotment or transfer of equity shares or other capital assets of a company to or from a Non-Resident must be carried out with internationally accepted valuation techniques.
Additionally, under the RBI law, FDI valuation needs to be submitted with relevant forms to complete the share transaction. Valuation is required when the shares/ debentures of the company are calculated based on the fair and actual market value received. Hence, every FDI transaction requires proper planning regarding value assessment to avoid any discrepancy in contractual understanding and fair value.
