REGULATORY COMPLIANCES FOR FOREIGN INVESTMENT IN INDIA
For a country where capital is not readily available, Foreign Direct Investment (FDI) has been an important source of funds for companies. Under FDI, overseas money, either by an individual or entity, is invested in an Indian company.
In India foreign direct investment is regulated by the Foreign Exchange Management Act 2000, and governed by the Reserve Bank of India.
There are two types of route for FDI:
1. Automatic route
2. Government route
Automatic Route
Under the Automatic Route, the foreign investor or the Indian company does not require any approval from the Reserve Bank or Government of India for the investment.
Government Route
Under the Government Route, the foreign investor or the Indian company requires prior approval from the Reserve Bank or Government of India for the investment.
REGULATORY COMPLIANCES FOR INVESTMENT OUTSIDE INDIA
Overseas Direct Investment (ODI) means investment by the Indian company or Indian resident by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange, signifying a long term interest in the foreign entity (JV or WOS). Overseas Direct Investment can be made under approval route or under automatic route
Automatic route
In Automatic route, Indian investor requires no approval from government or RBI for investment in foreign entity. Government route
In Government route, Indian investor requires prior approval from government or RBI for investment in foreign entity
"At DNS & Associates, we offer various services related to FDI/ ODI which includes:
a) RBI Compliances related to equity infusion;
b) Assistance in filing of FC-TRS;
c) Registration of company on RBI's FIRMS portal;
d) FLA Return;
e) Compliances related to transfer of shares from person resident in India to Person resident outside India;
f) Opinion(s) and advisory related to various FEMA provisions"