Short answer: a non-resident individual can put money into an Indian private company or LLP on one of two bases. Repatriable: foreign direct investment under Schedule I of the FEMA (Non-Debt Instruments) Rules 2019, open to any person resident outside India, with sectoral caps, pricing guidelines and RBI reporting (Form FC-GPR within 30 days of allotment), and free repatriation after tax. Non-repatriable: under Schedule IV, open only to NRIs and OCIs, treated as domestic investment with no FEMA pricing and no FC-GPR, but with sale proceeds credited to an NRO account and taken out within USD 1 million a financial year. The 12 June 2026 amendment extended the listed-company route to all foreign individuals. It did not change how anyone invests in a private company.
This note explains the mechanics and the compliance. Whether a particular investment is a good idea is not something it addresses.
Who can use which route
| Investor | Schedule I: repatriable FDI | Schedule IV: non-repatriable | Schedule III: listed shares on the exchange |
|---|---|---|---|
| NRI (Indian citizen resident abroad) | Yes | Yes | Yes |
| OCI (registered Overseas Citizen of India) | Yes | Yes | Yes |
| Foreign individual without an OCI card | Yes | No | Yes, from 12 June 2026 |
| Citizen of a country sharing a land border with India | Government approval route | NRI or OCI only | Subject to the land-border proviso |
The last row is the Press Note 3 regime, which applies to individuals as well as companies. It is covered in Press Note 3 after the 2026 changes.
The repatriable route: Schedule I
This is foreign direct investment, and it carries the full FDI framework.
| Requirement | What it means |
|---|---|
| Entry route and sectoral cap | Most sectors allow 100% under the automatic route; some have caps, conditions or need approval |
| Source of money | Inward remittance through banking channels, or a debit to your NRE or FCNR(B) account; not NRO |
| Allotment | Within 60 days of receiving the money, or it must be refunded within 15 days |
| Price on issue | Not less than fair value, by an internationally accepted pricing methodology on an arm's length basis |
| Who certifies the value | A chartered accountant, a SEBI-registered merchant banker or a practising cost accountant |
| Reporting the issue | Form FC-GPR on the RBI's FIRMS portal, through the company's authorised dealer (AD) bank, within 30 days of allotment |
| Reporting a later transfer | Form FC-TRS within 60 days, for a transfer between a resident and a non-resident |
| Annual | The company's FLA return by 15 July, every year the investment subsists |
On a later transfer, the pricing guidelines point in the direction that protects India's reserves: a resident selling to you must receive at least fair value, and when you sell to a resident you may receive no more than fair value.
These filings belong to the company and, for FC-TRS, to the resident party, but a late one costs the investor time at exit. The company-side sequence is in bringing in share capital and filing FC-GPR, and what a delay costs in the FEMA filings companies miss.
The non-repatriable route: Schedule IV
Schedule IV lets an NRI or OCI, or a company, trust or partnership they own and control, invest on a non-repatriation basis. Such investment is deemed to be domestic investment, made on the same footing as a resident's.
| Feature | Schedule IV position |
|---|---|
| Who | NRIs, OCIs, and entities owned and controlled by them |
| Instruments | Shares and convertible instruments of an Indian company; capital of an LLP; capital of a partnership firm or proprietary concern |
| Sectoral caps and FDI conditions | Do not apply, apart from Schedule IV's own prohibited list |
| Prohibited | A Nidhi company; agricultural or plantation activities; real estate business; construction of farm houses; dealing in transferable development rights. For firms and proprietary concerns, print media is also excluded |
| FEMA pricing guidelines | Do not apply |
| FC-GPR on issue | Not required, because the investment is not FDI |
| Source of money | Inward remittance, or your NRE, FCNR(B) or NRO account |
| Where the proceeds go | NRO account only, whichever account the money came from |
The entry is easier; the exit is narrower. Three consequences follow.
Sale proceeds are capped on the way out. They leave India within the USD 1 million per financial year facility, on documentary evidence, as set out in the USD 1 million NRO limit. A large exit takes several years, or a Reserve Bank application.
The character is fixed at the start. A non-repatriable holding cannot simply be redesignated. It becomes repatriable only on a transfer to someone who will hold it on a repatriable basis, at which point the FDI rules, the pricing guidelines and Form FC-TRS all apply.
The paper trail matters years later. When you eventually remit sale proceeds, the bank will ask for proof that the investment was made on a non-repatriation basis. The board resolution, the offer letter and the share certificate should say so.
Income tax is separate from all of this. Schedule IV switches off the FEMA pricing guidelines, not the Income-tax Act. An investor who receives shares for less than their fair market value can be taxed on the shortfall under Section 56(2)(x) of the 1961 Act, now Section 92 of the 2025 Act. On the company's side, the tax on share premium above fair value in Section 56(2)(viib), known as angel tax, no longer applies from financial year 2024-25.