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iSAFE Notes – Expertvuw
Fundraising · Convertible Instruments

iSAFE Notes and Convertible Instruments for Indian Startups – CCPS, Convertible Notes and Compliance

Last updated: 2 October 2026

Early-stage startups often raise money now and set the valuation later. In India that is done through instruments such as iSAFE (issued as CCPS) and convertible notes. Expertvuw’s team helps structure the instrument, complete Companies Act approvals and filings, and handle FEMA reporting for foreign investors.

Overview

How Convertible Funding Works in India

The US-style SAFE is not a recognised instrument under Indian company law, so Indian startups use equivalents. iSAFE (India Simple Agreement for Future Equity), introduced by 100X.VC, is legally issued as compulsorily convertible preference shares (CCPS) under sections 42, 55 and 62 of the Companies Act, 2013. It is not debt, has no redemption, and converts into equity at a later priced round or specified event, at a discount or valuation cap agreed upfront.

Convertible notes are debt instruments that convert into equity. For DPIIT-recognised startups, a convertible note of ₹25 lakh or more received in a single tranche, and converted or repaid within ten years, is exempt from the deposit rules. Convertible notes from non-residents are permitted for DPIIT startups and reported in Form CN on FIRMS within 30 days.

Only companies can issue these instruments — not LLPs. The issue must follow private placement or preferential allotment procedures, with valuation and filings, and with FEMA pricing rules for foreign investors.

Basis: Companies Act, 2013 (sections 42, 55, 62); Companies (Acceptance of Deposits) Rules, 2014 – Rule 2(1)(c)(xvii); FEM (Non-debt Instruments) Rules, 2019; RBI Master Direction – Foreign Investment (Form CN). Last updated: 27 September 2026.

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What This Service Covers

What We Help With

1

Choosing between iSAFE (CCPS) and convertible notes

2

Term sheet review: discount, cap, conversion events

3

Board and shareholder approvals, private placement offer

4

Allotment filings (PAS-3 and related forms)

5

FEMA pricing and FC-GPR or Form CN reporting

Key Facts

SAFE not recognised

Indian startups use iSAFE (CCPS) or convertible notes instead.

iSAFE form

Issued as compulsorily convertible preference shares.

Convertible notes

DPIIT startups: ₹25 lakh or more per tranche, convert or repay within 10 years.

Foreign investors

Convertible notes reported in Form CN within 30 days.

Companies only

LLPs cannot issue these instruments.

Procedure

Private placement or preferential allotment rules apply.

Common Issues

Common Mistakes

Convertible rounds are simple commercially but not legally.

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Related Services

Related services

Convertible instruments connect with these services.

Angel Investors

Preparing for angel rounds.

Startup India Registration

DPIIT recognition.

Fundraising Compliance

Company law steps for funding.

FDI Compliance

Foreign investment rules.

Documents Required

Documents we need from you

Company Documents

Round Details

Our Process

How the Process Works

1

Structure

Choose the instrument.

2

Terms

Finalise conversion terms.

3

Approve

Board and shareholder resolutions.

4

Offer

Private placement offer and receipt of funds.

5

Allot

Allot and file with MCA.

6

Report

FEMA reporting where applicable.

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At Conversion

At Conversion

Conversion needs its own compliance.

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Get in Touch

Share your query and our team will reply during business hours.






    FAQs

    Frequently Asked Questions

    Is a SAFE valid in India?

    A US-style SAFE is not a recognised instrument; Indian startups use iSAFE (issued as CCPS) or convertible notes.

    An India-specific SAFE structure issued as compulsorily convertible preference shares.

    DPIIT startups can issue notes of ₹25 lakh or more per tranche, converting or repaid within ten years.

    No. Only companies can.

    Yes, subject to FEMA rules; convertible notes are reported in Form CN within 30 days.

    About Expertvuw

    Who Handles Your Round

    CS Chetna Shoor, Company Secretary and Director, Expertvuw

    CS Chetna Shoor

    ACS – Director, Expertvuw Management Pvt Ltd

    Fundraising support is provided by Expertvuw’s team. Expertvuw does not guarantee funding, does not solicit investment from the public and is not a SEBI-registered intermediary; valuations and certifications come from independent eligible professionals.

    Expertvuw Management Pvt Ltd