Now, a Foreign Company can merge with an Indian Company with prior Approval from RBI.
MCA on 14 April 2017 notified Section 234 of Companies Act, 2013 and issued rules thereunder, thereby opening the gates for merger and amalgamation of a foreign company with an Indian company and vice versa.
The newly inserted Rule 25A states that
1. Prior Approval from RBI is mandatory for a foreign company, incorporated outside India to merge with an Indian company by complying the provisions under Sec 230 - 232 of Companies Act, 2013 and rules made thereunder;
2. An Indian company may merge with a foreign company incorporated under following jurisdictions after obtaining prior approval of RBI and complying with the provisions of Sec 230 - 232 of Companies Act, 2013 and rules made thereunder:
3. After getting approval from RBI for such merger, such company has to make an application to NCLT.