The Government of India undertook a comprehensive exercise of simplifying overseas investment rules in consultation with the Reserve Bank of India. The revised regulations have simplified the existing framework for overseas investment and have aligned the same with the current business and economic dynamics.
RBI introduced the concept of “Downstream Investment (DI)” or “Indirect Foreign Investment”. In this article, an elaborate discussion is made about “Downstream Investment” and “Indirect Foreign Investment”.
Foreign investors are more inclined toward options where they have complete control over the entity and also such entities can enjoy benefits as domestic companies. FOCC has become a wonderful source of investment for such investors. FOCC can conduct business in India as a domestic company.
Overseas Direct Investment involves outflow of funds from the country and therefore, the Government wants to be more vigilant about it. Provisions related to ODI already contain a lot of permissions from the Reserve Bank of India and also free ODIs are permitted subject to fulfillment of lots of attached conditions. Similarly, once the process of ODI completes, various reporting obligations start for investors. In this article, we have carried out a detailed discussion of reporting obligations of investors and other regulations applicable.
However, the need to buy property outside India keeps on arising in various situations like a resident Individual settling outside India, an Investment opportunity outside India, a business entity needs to set up business outside India, and many others.
Overseas Direct Investments are regulated by Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, notified vide Notification No. FEMA.120/RB-2004 dated July 7, 2004.
Doing business outside of India and growing business internationally is an essential part of a company’s business expansion policy. If you as a business enterprise are looking for a way to set up a business outside of India, along with the legal requirements of that country a few of the Indian legislation and statutory requirements have to be kept in mind as well.
ODI helps companies to get direct access to newer and more extensive markets, better technologies which would enable them to increase their customer base and achieve a global reach, but to unintentional violation of regulations, Investment in wholly owned subsidiaries and joint ventures outside India by person resident in India is governed by FEMA.
Investment by NRI in india can be done on Repatriation basis and non-Repatriation basis. This article contain all all the norms and limitation given to NRI if they wants to invest in India.
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