ESOP for NRI and Non-Resident Employees in Delhi

Delhi cap tables often span several nationalities at once, a US-based NRI co-founder, an OCI advisor and a foreign-national hire in a Connaught Place office or a Nehru Place tech firm. The moment shares go to any of them as a non-resident, FEMA and RBI reporting kick in alongside your scheme, and the account type and treaty position can differ by country. Patron Accounting handles it from the employer's side: confirming eligibility, structuring the grant under the FEMA rules, filing the RBI reporting through your Delhi AD bank, and getting the pricing and repatriation right.

This page is for the employer, not the employee. It answers how your Delhi company grants and reports ESOPs to NRI and non-resident staff under FEMA, with the corporate filings sitting at RoC Delhi. For the employee's own tax computation, perquisite, capital gains and DTAA, see our dedicated ESOP tax page for NRIs and non-residents.

A grant to a non-resident is the inbound direction of cross-border equity, an Indian company placing shares with a person outside India, and in Delhi the practical complication is usually that several grantees sit in different countries at the same time. The framework below applies grant by grant, but the account types and treaty positions are read per grantee.

• NDI Rules 2019: issuing ESOPs to a person resident outside India is a foreign investment under Schedule I of the FEMA (Non-debt Instruments) Rules, 2019, read with the Mode of Payment and Reporting Regulations, reported in Form ESOP for each grantee.
• Companies Act: the grant follows Section 62 and Rule 12 and the company's ESOP scheme, with corporate records filed at RoC Delhi, in the city where the MCA is itself headquartered.
• Tax and treaty: at sale the grantee's position depends on the relevant DTAA, and a foreign national claiming treaty relief needs a Tax Residency Certificate and Form 10F, which we line up alongside the FEMA reporting.

• Treaty relief and documents: at sale a foreign-national or NRI grantee may claim relief under the relevant DTAA, the US, UK and UAE treaties all reading differently, which needs a Tax Residency Certificate and Form 10F, a recurring point for Delhi's NRI investor base that we prepare ahead of the exit.
• Fair-value pricing: FEMA requires the price to a non-resident to be not less than fair value, set by an internationally accepted method such as discounted cash flow and certified by a CA or merchant banker, with some flexibility for DPIIT-recognised startups.
• Repatriation and accounts: proceeds run through the grantee's NRE or NRO account; a grantee non-resident at grant may hold on a repatriation basis with NRE routing, while an NRI who acquired shares while resident in Delhi usually holds on a non-repatriation basis through NRO.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free ESOP for NRI Employees consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Patron Accounting LLP is a CA and CS firm with 15+ years on FEMA, NDI Rules, RBI reporting and ESOPs for Indian companies with global teams.

With offices in Pune, Mumbai, Delhi and Gurugram, Patron Accounting serves businesses across India, both in-person and remotely.

Eligibility: the grant is made under Section 62(1)(b) of the Companies Act read with Rule 12 of the Share Capital Rules, under which a non-resident employee or director qualifies subject to the promoter and over-10-percent-director exclusion, with corporate records filed at RoC Delhi in the city where the MCA is headquartered.

Foreign investment: the issue to a person resident outside India is a foreign investment under Schedule I of the FEMA (Non-debt Instruments) Rules, 2019, read with the FEMA (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, reported in Form ESOP for each grantee.

Reporting and pricing: Form ESOP is filed within 30 days through the FIRMS portal and the AD bank, with a late submission fee for delay; shares must be priced at not less than fair value certified by a chartered accountant or merchant banker.

Tax, treaty and repatriation: at sale the grantee's tax position turns on the relevant DTAA, with a Tax Residency Certificate and Form 10F needed to claim treaty relief, while sale proceeds route through the NRE or NRO account depending on whether the shares are held on a repatriation or non-repatriation basis under FEMA.

Authoritative sources: the Reserve Bank of India (NDI Rules, FIRMS, Form ESOP reporting), the RBI FIRMS portal, the Ministry of Corporate Affairs (Section 62, Rule 12), and the FEMA, 1999 and NDI Rules bare text.

The Form ESOP deadline is just 30 days from the grant, and it is the step employers most often miss, building up late submission fees and a FEMA exposure that surfaces in the next audit or fundraise. The fair-value certificate and the repatriation basis also need to be in place at the grant, not retrofitted later. Set the FEMA workflow up before you grant to your NRI team, so the equity is compliant from day one.

Giving your NRI and non-resident employees equity is straightforward in principle, they qualify like any employee, but the moment shares cross to a non-resident, FEMA and RBI reporting apply, with a 30-day Form ESOP deadline, fair-value pricing and repatriation to manage.

Patron Accounting LLP, a CA and CS firm with 15+ years of FEMA and ESOP experience, runs the employer side end to end and coordinates with the tax workstream, so your global team gets its equity cleanly and compliantly.

Start with the national ESOP for NRI and Non Resident Employees service, then explore complementary ESOP services across India.

• ESOP for NRI and Non Resident Employees in India - the national parent service
• ESOP Services Hub - the full ESOP advisory hub - route by stage, scenario or tax
• ESOP Scheme Design - design the option pool, vesting schedule and leaver terms
• ESOP Valuation Services - Rule 11UA fair-market-value reports for grants and exercises
• ESOP Corporate Filings - MGT-14, PAS-3 and Form SH-6 register filings
• ESOP Perquisite Tax (Sec 17(2)(vi)) - perquisite tax and TDS computation at exercise

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