A Singapore investor can subscribe to shares, compulsorily convertible preference shares or convertible notes in an Indian startup under FEMA and the Non-Debt Instruments Rules. Pricing must meet valuation norms, the startup reports the investment to the RBI on the FIRMS portal, and sectoral caps and Press Note 3 must be checked. Investment documents typically include a term sheet, share subscription agreement and shareholders' agreement, which we draft or review from the Indian law perspective.
- Document route
- Singapore notary public, then apostille from the Singapore Academy of Law
- Time difference
- Singapore is 2h30 ahead of IST all year
- Typical instrument
- CCPS with investor rights
- Reporting
- FC-GPR in 30 days; Form CN for notes
Investing in Indian Startups from Singapore: how it works
We begin with due diligence on the startup: its incorporation, capital table, past fundraising and filings, intellectual property ownership, key contracts, employment arrangements and regulatory licences. We check whether the sector permits foreign investment under the automatic route and whether any beneficial owner of the investing vehicle triggers Press Note 3. We then negotiate the term sheet and draft the subscription and shareholders' agreements, making sure that anti-dilution, liquidation preference and exit rights are drafted so that Indian pricing guidelines are not breached on conversion or exit.
On closing, the investor remits funds through banking channels, and the company allots shares within the permitted period and files Form FC-GPR with a valuation report. Convertible notes are only available to recognised startups and must meet specific conditions. Post-closing, we monitor reporting, board rights and compliance. Exits through secondary sales are reported in Form FC-TRS. Funds registered as foreign venture capital investors with SEBI benefit from some pricing relaxations, while others follow the standard rules.
What clients in Singapore should know
- Gains on shares of Indian startups acquired after 1 April 2017 are taxable in India under the amended India-Singapore treaty, which affects exit modelling.
- Put options and assured returns in shareholders' agreements are restricted for foreign investors under FEMA, so exit clauses need careful drafting.
- Startups recognised by DPIIT can issue convertible notes to foreign investors, a common instrument for Singapore angels at the seed stage.
Step by step from Singapore
Video consultation
A call at a time that suits Singapore, after we have read your documents.
Documents signed in Singapore
Singapore notary public, then apostille from the Singapore Academy of Law
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 Singapore where needed.
The full guide
This page covers what changes when you are in Singapore. 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 Singapore and the Doing Business in India practice area.
Questions from clients in Singapore
Can a Singapore investor buy shares from existing Indian shareholders?
Yes, through a secondary transfer reported in Form FC-TRS, at a price not below fair value. Tax may need to be withheld by the buyer in some cases.
Can we invest through a SAFE?
Not directly in the US form. The economic effect can be achieved through compulsorily convertible preference shares or convertible notes structured to comply with Indian rules.
Does Press Note 3 apply to a Singapore fund?
It applies if any beneficial owner of the investment is a resident or citizen of a country sharing a land border with India. We review the fund's ownership before closing.