LawRato

5% shareholding in Foreign Startup


08-Aug-2025 (In Tax Law)
I have an offer to get 5% shareholding in an Australian company giving my CTO services, company name is Tenderfy How should i get the shareholding executed so that I don’t get into FEMA or any other tax related trouble here in India Its a startup current valuation of the company is very low as it is only few months in operations but pretty soon they will be raising the funding so I want this to be initiated asap. Can you please let me know what process to be followed
Answers (2)

Answer #1
513 votes
Hi there, taking shareholding/equity in foreign startup definitely bring you under scrutiny of the FEMA act but since you are getting it through service therefore chances are you can avoid it. However to know the status with respect to the need of approval from RBI and other authorities we'll have to do a thorough Due Diligence. It's advisable to contact me and requisite details to assist you better.
Helpful? LawRato LawRato
Advocate Ishan Parashar

Adv. Ishan Parashar

LawRato Delhi | 200+ Answers
Chat with Advocate Ishan Parashar Chat 
Answer #2
717 votes
You can accept the 5% shares by executing a formal agreement (Shareholders/ESOP/Sweat Equity) showing allotment for CTO services, backed by valuation. File Form ODI with your bank under FEMA within 30 days, keep valuation proof, disclose the holding in your ITR (Schedule FA), and comply with tax on future income. I can help with drafting and filings to ensure FEMA and tax compliance.
Helpful? LawRato LawRato
Advocate Adarsh Kumar

Adv. Adarsh Kumar

LawRatoDelhi | 400+ Answers
Chat with Advocate Adarsh Kumar Chat 

Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.

Report abuse?

Connect with top Tax lawyers for your specific legal issue
Connect with a Lawyer
Comments by Users

No Comments! Be the first one to comment.

"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."

All Answers

Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

LawRato