The Ministry of Corporate Affairs (MCA) has introduced the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024, simplifying the process for foreign companies to merge into their Indian wholly-owned subsidiaries.
This move is expected to streamline the reverse flipping structure, as part of the central government measures towards ease of doing business in India significantly.
Key Highlights: – Fast-Track Merger: ‘Reverse Flipping’ can now be done through the fast-track merger scheme under section 233 of the Companies Act 2013, reducing delays and complexities. – RBI Approval: The Reserve Bank of India requires prior approval for both the Indian wholly owned subsidiaries and foreign holding entities involved in the merger. However, the transactions compliant with the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 already have a deemed approved towards the transaction, streamlining the process further. – Land Border Declaration: The Central Government must receive a declaration for mergers with companies from countries sharing a land border with India.
These amendments mark a significant step towards making India a more attractive destination for businesses looking to consolidate their operations.
Read this article authored by Abhisshek Singlla and Prajjwal Sharma: https://lnkd.in/gW2WTEYR
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