A Foreign Owned and Controlled Company (FOCC) is an Indian entity that has received foreign investment and is ultimately owned or controlled by persons resident outside India. Despite being incorporated in India, FOCCs are subject to foreign investment regulations when investing in other Indian companies. This article examines the complex pricing conditions applicable when an FOCC acquires shares from both resident and non-resident shareholders.

Key Takeaways:

• An FOCC, though incorporated in India, is treated as a foreign investor for the purposes of downstream investment regulations under FEMA.
• When an FOCC acquires shares from resident sellers, it must comply with FDI pricing guidelines including the fair market value floor.
• When acquiring from non-resident sellers, the pricing framework involves a combination of FDI and ODI pricing norms.
• The regulatory distinction between primary and secondary acquisitions by FOCCs creates different pricing obligations and compliance pathways.
• Failure to comply with applicable pricing conditions can render the acquisition non-compliant and trigger FEMA penalties.

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