Article · 11 min read

Convertible Notes for Foreign Investors in Indian Startups: The 2026 Rules Explained

TaxTMI editorial · TaxTMI Free Intermediate India

This is the current RBI convertible note rulebook in one place, and it reflects the 2023 FEMA amendment that most older explainers get wrong. It confirms the four gates you must clear: DPIIT recognition, a minimum of Rs 25 lakh per investor per tranche, conversion or repayment within 10 years (up from 5), and operating in an automatic-route FDI sector, plus the Form CN filing within 30 days.

  • Only a DPIIT-recognized startup can issue a convertible note to a foreign investor, no recognition means no note
  • Minimum ticket is Rs 25 lakh per investor per tranche, and conversion or repayment must happen within 10 years
  • Every foreign issuance triggers a Form CN filing on the RBI FIRMS portal within 30 days, and an unconverted note past its tenor is a compounding-level violation
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The question it answers

  1. Can I even use a SAFE in India, or do I have to do a CCPS or convertible note?

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