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Are there any restrictions for setting up of a second generation company? Can such step down subsidiaries be set up under the Automatic Route?

April 26, 2017automatic COMPANY generation route setting step subsidiaries

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Are there any restrictions for setting up of a second generation company? Can such step down subsidiaries be set up under the Automatic Route?

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A. There are no restrictions on entities having JVs/WOSs abroad setting up second generation companies (step-down subsidiaries) within the overall limits applicable for investments under the Automatic Route. However, companies wishing to set up step-down subsidiaries to undertake financial sector activities will have to comply with the additional requirements for direct investment in the financial sector.