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ESOP for NRI and Non-Resident Employees in Delhi

For Delhi companies whose cap tables run across the US, UK and UAE, from Connaught Place finance houses to Nehru Place IT firms and the Saket-Aerocity corporate belt, with RoC Delhi and the MCA head office in the same city.

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Eligibility: yes, an Indian company can grant ESOPs to NRI and non-resident employees.

FEMA: issuance to non-residents under the NDI Rules, reported to the RBI.

Reporting: Form ESOP within 30 days via the FIRMS portal.

Fees: From INR 19,999 (Exl GST and Govt. Charges)

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What This Service Covers

📌 TL;DR - ESOP for NRI Employees Services at a Glance

An Indian company can grant ESOPs to its NRI and non-resident employees; the grant is a foreign investment under the NDI Rules, reported to the RBI in Form ESOP within 30 days, with fair-value pricing and repatriation at sale. We handle the employer side.

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.

Can an Indian Company Grant ESOPs to NRI Employees?

Yes, and Delhi companies often do it across several countries at once. Rule 12 of the Companies Act treats 'employee' as covering permanent employees and directors wherever they are based, so a Connaught Place product company, a Nehru Place trading house or a Saket consumer-tech firm can grant to an NRI in the US, an OCI in the UK and a foreign national in the UAE alike, whether they sit on your rolls or those of an overseas branch or subsidiary.

The Companies Act lets you grant; FEMA and tax shape what happens next. Each grantee is resident outside India, so every grant is a foreign investment carrying the RBI reporting on top of the ordinary scheme and Section 62 steps, and because Delhi carries a large NRI investor base the eventual tax turns on the relevant DTAA, which differs country by country. The promoter and over-10-percent-director bar applies as for any employee.

Key Terms for ESOP for NRI Employees:

Form ESOP: the RBI reporting form, filed on FIRMS within 30 days of each grant to a non-resident.
DTAA: the double-tax treaty, US, UK or UAE among others, that sets the grantee's tax position at sale.
TRC and Form 10F: the residency certificate and declaration a foreign national needs to claim treaty relief.
NRE vs NRO: the account route that decides whether sale proceeds can be remitted abroad or stay in India.

Reported under NDI Rules 2019

The FEMA Regime: Issuance to 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.

The Delhi picture. Because Delhi companies frequently grant across several countries at once, the recurring issue here is less about a single move abroad and more about handling NRI, OCI and foreign-national grantees side by side. Each is resident outside India, so each grant is a foreign investment reported in Form ESOP, but the account types and the DTAA position vary, the US, UK and UAE treaties all differ, and a foreign national claiming treaty relief at sale will need a Tax Residency Certificate and Form 10F. The Section 62 resolution and scheme go to RoC Delhi, with the MCA itself headquartered in the capital, while the FEMA leg is reported through your authorised dealer bank near Connaught Place or the Nehru Place and Saket business hubs.

What We Handle: Multi-Country Grants and Treaty Relief

Service	What We Do
Grant to a non-resident	File Form ESOP on FIRMS within 30 days, per grantee, through your AD bank.
Grantees across countries	Map each US, UK or UAE grantee to the right DTAA position and account type.
Treaty relief at sale	Arrange the Tax Residency Certificate and Form 10F for foreign-national grantees.
Allotment of shares	Report the issuance to the non-resident once shares are allotted.
Delay in filing	Regularise with the RBI late submission fee where the 30-day window slips.

Our Process

How the Engagement Runs

From the eligibility check to the eventual exit, we run the employer side end to end, reading each grantee against the right country's treaty when several sit abroad at once.

Step 1

Confirm eligibility

We check each non-resident grantee against Rule 12 and the scheme, noting their country of residence.

Rule 12 Scheme check

Eligibility Confirmed 01

Step 2

Value the shares

We obtain the FEMA fair-value certificate from a CA or merchant banker for the grant price.

DCF valuation CA / MB certified

Shares Valued 02

Step 3

Grant and approve

We pass the board and special resolution and issue the grant, with records to RoC Delhi.

Board + SR Grant issued

Granted 03

Step 4

Report to the RBI

We file Form ESOP within 30 days on FIRMS through your AD bank, one filing per grantee.

Within 30 days FIRMS + AD bank

Reported 04

Step 5

Manage the lifecycle

We report allotment, set the DTAA and TRC position, and fix repatriation for the exit.

Allotment report NRE / NRO

Lifecycle Managed 05

Pricing and Repatriation

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.

Common Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Wrong treaty applied at sale	Over-withholding or denied relief for a US, UK or UAE grantee	Read each grantee against the correct DTAA and obtain the TRC and Form 10F.
Multiple grantees, one filing	Missed Form ESOP reports across countries	File per grantee within 30 days, tracking each within the 30-day window.
Price below fair value	Undervaluation on the foreign-investment record	Arrange a certified DCF valuation before the grant.
Repatriation basis left open	Blocked or delayed remittance at exit	Set NRE or NRO routing at grant, not at sale.

NRI-Employee ESOP Fees

Fee Component	Amount
Patron Accounting Professional Fees	From INR 19,999 (Exl GST and Govt. Charges)
Scope of the starting fee	Eligibility check, FEMA structuring and the Form ESOP reporting for a grant
Fair-value valuation, share-issuance reporting, repatriation set-up	Scoped on top
AD bank or government charges	At actuals
Regular global hiring	Reporting handled on an ongoing basis

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.

Time Taken

Stage	Estimated Timeline
Confirming eligibility and structuring the grant	Usually a few days
Fair-value valuation and board and shareholder approvals	1 to 2 weeks
Form ESOP filing	Within the 30-day window after the grant

Repatriation set-up is handled at grant and revisited at the eventual sale. For ongoing global hiring, we fold the reporting into a regular cycle so each grant is captured on time.

Key Benefits

Why Handle It With a Specialist

Every country covered

US, UK and UAE grantees each read against the right treaty and account type.

Filed per grantee

A Form ESOP filing for each non-resident, none slipping the 30-day window.

Treaty relief secured

TRC and Form 10F ready, so NRI grantees claim the right relief at sale.

Clean remittance

NRE or NRO basis fixed at grant, so proceeds leave India without a hold.

Trusted by Companies With Global Teams

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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.

The Reporting Map, Grantee by Grantee

Event	Reporting
Grant to a non-resident	Form ESOP on FIRMS within 30 days, one per grantee, via the AD bank
Grantees in different countries	Each mapped to the relevant DTAA and account type
Allotment of shares	Issuance to the non-resident reported on allotment
At sale, treaty relief	TRC and Form 10F for the foreign-national grantee
At exit	Repatriation through the NRE or NRO account

Legal Framework

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.

Frequently Asked Questions

Common questions on granting ESOPs to NRI and non-resident employees, the FEMA reporting, pricing and repatriation.

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We have NRI, OCI and foreign-national employees on one scheme. Is the FEMA treatment the same?

For the FEMA reporting itself, yes: each of them is a person resident outside India, so every grant is a foreign investment reported in Form ESOP within 30 days, regardless of whether the grantee is an NRI, an OCI or a foreign national. What differs downstream is the account type and the repatriation route, and the tax and treaty position by country. For a Delhi company granting across several nationalities at once, we map each grantee to the right account and treaty so the single scheme stays compliant for all of them.

A foreign-national employee wants treaty relief when they sell. What do they need?

The gain on sale of shares in an Indian company is taxable in India, and a non-resident can claim relief under the relevant DTAA on the India-taxed portion. To do so they generally need a valid Tax Residency Certificate from their home country plus Form 10F, and a foreign tax credit is claimed through Form 67 before the return due date. This is the employee's own filing, not the employer's, but on the Delhi grants we set up we flag the documentation early so the grantee is not scrambling at exit.

We file with RoC Delhi and the MCA is in Delhi. Does the FEMA reporting go to the MCA?

No. The MCA and RoC Delhi handle the corporate side, the Section 62 special resolution and the scheme records, and being in the capital does not change where the FEMA leg goes. Form ESOP is filed with the RBI through the FIRMS portal, routed via your authorised dealer bank, not with the MCA. We run both tracks so the RoC filings and the RBI Form ESOP stay consistent, each within its own 30-day or annual window.

What FEMA reporting applies when we grant ESOPs to a non-resident employee?

The grant is a foreign investment under Schedule I of the NDI Rules 2019. The company must file Form ESOP within 30 days of the grant, through the RBI FIRMS portal via its authorised dealer bank, and report the share issuance on allotment. Delayed filing does not invalidate the grant but attracts a late submission fee set by the RBI. The reporting obligation is on the company, which is why employers, not employees, need to manage it.

At what price must shares be issued to a non-resident employee?

Under FEMA, shares issued to a person resident outside India must be at not less than the fair value, determined by an internationally accepted method such as discounted cash flow and certified by a chartered accountant or merchant banker. This prevents undervaluation and protects the foreign-investment record. DPIIT-recognised startups have some flexibility in ESOP pricing. We arrange the certified valuation before the grant so the price is FEMA-compliant.

Is there a limit on ESOPs to non-resident employees?

Under general permission, an Indian company can issue ESOPs to its non-resident employees, or to employees of its overseas joint venture or wholly owned subsidiary, directly or through a trust, up to 5 percent of its paid-up capital. Issuance beyond that level is possible but attracts additional conditions. Most company schemes sit comfortably within this, but where a larger allocation is planned we structure it to stay compliant.

How is the NRI employee's ESOP taxed?

This page covers the FEMA and reporting side; the tax is a separate workstream. In outline, the perquisite is taxed at exercise with the employer deducting TDS, and the gain on sale is taxed as capital gains, with a non-resident getting relief under the relevant DTAA on the India-taxed portion. For the full computation, including residency, the perquisite, capital gains and treaty relief, see our dedicated ESOP tax page for NRI and non-resident employees.

Does it matter if the employee is an NRI, OCI or foreign national?

For the FEMA framework, what matters is that the person is resident outside India, so the issuance is a foreign investment and the Form ESOP reporting applies, whether the employee is an NRI, an OCI or a foreign national. There can be differences in account types and repatriation, for example NRE versus NRO routing, and in the tax and treaty position by country. We tailor the structuring and the repatriation set-up to the specific status.

Quick Answers

Can NRIs and non-resident employees be granted ESOPs? Yes, non-resident employees qualify to be granted ESOPs by an Indian company.
Which regime governs ESOPs to non-residents? They are governed by the NDI Rules 2019, specifically Schedule I.
What reporting is required after allotment? The company must file Form ESOP within 30 days of allotment, via the FIRMS portal.
How must the issue price be fixed? Shares cannot be priced below fair value, as certified by a CA or a Merchant Banker.
How can sale proceeds be remitted abroad? Proceeds at the time of sale can be repatriated through an NRE or NRO account.

Why Timing Matters

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.

Give Your Global Team Equity, Compliantly

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.

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Related Services

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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Content Created: 24 June 2026 | Last Updated: | Next Review: 24 September 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed every six months for changes to the NDI Rules 2019 or the Mode of Payment and Reporting Regulations, Form ESOP format or deadlines, FIRMS portal procedures, FEMA pricing or repatriation rules, and Rule 12 eligibility (Tier 2 freshness).