If any digital media company intends to raise foreign funding, it will first have to seek the approval of the Union Government.

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Money Media Monday, November 16, 2020 - 18:58

Days after digital and online media was brought under the Ministry of Information and Broadcasting, the ministry has issued guidelines for these entities to comply with Foreign Direct Investment norms. This notice is for all entities involved in uploading or streaming of news and current affairs through digital media. On September 18, 2020, the Union Government had permitted 26% FDI under government approval route for digital media.

As per the guidelines, entities that have foreign investment of over 26% will have to furnish details to the ministry one month from now. They have also been asked to take necessary steps for bringing down the foreign investment to 26% by October 15, 2021 and seek the approval of the ministry.

The details that need to be furnished include company details and its shareholding pattern along with names and addresses of its directors or shareholders, names and address of Promoters or Significant Beneficial Owners of the entity and the PAN and latest profit & loss statement and balance sheet along with the Auditor report.

The companies will also have to furnish a confirmation that they are in compliance with the pricing, documentation and reporting requirements  under the FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and  Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019 along with copies of information on the past or existing foreign investment and investments by other entities, if any.

Companies that have foreign investment below 26% will also have to furnish the same details. Also, companies have been given a month to comply with the same.

The ministry also said in its notice that if any company intends to raise foreign funding, it has to seek approval of the Union Government through Foreign Investment Facilitation Portal of the Department for Promotion of Industry and Internal Trade (DPIIT).

Digital news companies will also have to seek the approval of the ministry if they intend to appoint any foreign personnel and seek security clearance for the same. “The entities are required to obtain security clearance for all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract or consultancy or any other capacity for functioning of the entity, prior to their deployment. For this purpose, the entities will apply to Ministry of Information & Broadcasting at least 60 days in advance and the proposed foreign personnel shall be deployed by the entity only after prior approval of this Ministry,” the ministry said in a notice.

The Union government, on November 11, issued an order to include digital and online media, as well as news and current affairs content online, under the purview of the Ministry of Information and Broadcasting.

The Government of India (Allocation of Business) Rules, 1961 has been amended to include ‘Films and Audio-Visual programmes made available by online content providers’ as well as ‘News and current affairs content on online platforms’ as well.