The new Overseas Investment (OI) Rules issued on August 22, 2022 replace all previously available exemptions to grant share-based awards to Indian residents with a single exemption (the new “general permission”), which requires, inter alia, that semi-annual reports be filed with the Reserve Bank of India (RBI).
The reports will need to be submitted by an Authorized Dealer Bank in India (i.e., the bank in India involved with the remittance of funds under the plan) and include information on the number of shares issued to Indian residents and funds remitted from India to purchase shares (if any).
Companies granting share-based awards to employees and directors of their Indian entities will need to determine if they can rely on the new general permission, and if so, be prepared to file the Form OPI on a bi-annual basis. Further, as the items to report on Form OPI are subject to interpretation, companies will need to discuss with their Authorized Dealer Bank how to complete the form.
For more information on the new exchange control rules in India, see our guest National Association of Stock Plan Professionals (NASPP) blog post here.