A Dutch investor can invest in an Indian startup by subscribing to equity shares or compulsorily convertible preference shares, or through convertible notes in a DPIIT-recognised startup, subject to FEMA pricing and reporting. Investor rights such as liquidation preference, anti-dilution, board seats and exit rights are written into a shareholders' agreement and mirrored in the company's articles. Angel tax on share premium was abolished by the Finance (No. 2) Act 2024.
- Document route
- Notaris or municipal legalisation, then apostille from the rechtbank
- Time difference
- India is 3.5 hours (summer) to 4.5 hours (winter) ahead
- Typical instrument
- CCPS with investor rights
- Reporting
- FC-GPR in 30 days; Form CN for notes
Investing in Indian Startups from the Netherlands: how it works
Before signing, we carry out legal due diligence on the Indian startup: incorporation records, cap table and past FEMA filings, founder and employee IP assignments, key contracts, employee stock option scheme and any litigation. Dutch investors are often surprised by how many Indian startups have missed filings or informal promises of equity to early employees. We then negotiate the term sheet and the definitive documents. FEMA constrains some familiar features: an assured return or guaranteed exit price to a non-resident is not permitted, and conversion of preference shares must follow a formula fixed at issue, at a price no lower than fair value at that time.
At completion the funds arrive from the Netherlands, the company allots shares within the permitted window and files Form FC-GPR. Investor rights must be written into the articles, because Indian courts give weight to the articles over a separate shareholders' agreement. For later rounds and exits, transfer pricing rules under FEMA apply again: a sale to a resident buyer cannot be priced above fair value, and a purchase from a resident cannot be below it. We also flag tax on exit under India's tax treaty with the Netherlands.
What clients in the Netherlands should know
- Convertible notes are available only for DPIIT-recognised startups and have a minimum ticket size per investor, so check recognition before using them.
- Founders' vesting, IP assignment and non-solicit clauses are enforceable in India; broad non-compete obligations after exit usually are not.
- Dutch funds structured as limited partnerships should confirm how India treats the fund for tax, as treaty access depends on the fund's residence and status.
Step by step from the Netherlands
Video consultation
A call at a time that suits the Netherlands, after we have read your documents.
Documents signed in the Netherlands
Notaris or municipal legalisation, then apostille from the rechtbank
Work in India
Our team files, appears and follows up in India, and shares scans of everything filed.
Result and handover
Certified copies and originals are couriered to you in the Netherlands where needed.
The full guide
This page covers what changes when you are in the Netherlands. For the law, the documents and the step-by-step procedure, read our main page on Investing in Indian Startups, or see all services for clients in the Netherlands and the Doing Business in India practice area.
Questions from clients in the Netherlands
Can a Dutch investor get a put option on an Indian startup?
Yes, but FEMA prohibits an assured return. The exit price must be at fair value at the time of exercise, not a fixed or guaranteed amount.
Is angel tax still relevant for Dutch investors?
No. The share premium tax known as angel tax was abolished from the 2025-26 assessment year by the Finance (No. 2) Act 2024.
Can we invest through a SAFE?
A US-style SAFE has no direct equivalent under FEMA. Indian rounds use compulsorily convertible preference shares or, for recognised startups, convertible notes instead.