RBI relaxes norms for foreign investment in startups

The Reserve Bank of India (RBI) has said that Foreign Venture Capital Investors (FVCIs) can invest in Indian startups irrespective of the sector in which the startup is engaged without prior permission of the apex bank. Sebi-registered FVCIs have also been permitted to invest in unlisted firms in sectors like biotechnology, nanotechnology and dairy without prior permission of the RBI.

RBI in its notification yesterday said, the extant regulatory



provisions have been reviewed and amended in order to further liberalise and rationalise the investment regime for FVCIs and to give a fillip to foreign investment in the startups.

The RBI further said FVCIs can also open a foreign currency account and/or a rupee account for the purpose of making transactions. Also, there will be no restriction on transfer of any security/instrument held by the FVCI to any person resident in or outside India.