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Payment made by Foreign parent Company for capital goods for Indian entity, FEMA - Foreign Exchange Management

Issue Id: - 117094
Dated: 16-3-2021
By:- Roopa Kamath
Payment made by Foreign parent Company for capital goods for Indian entity

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A US parent has made payments to a foreign vendor in foreign currency for the goods(computers and laptops) shipped to its india subsidiary. These are subsequently adjust to the monthly billing invoices of the subsidary. Are these transactions in violation of FEMA? if yes - what is the way out of this transaction and regularise these?

Foreign company has also paid for the rental deposit directly to the Indian builder for its premises office in India. Indian subsidiary did not have any bank account during this period. Are these pre incorporation expenses as per RBI/2006-2007/368A. P. (DIR Series) Circular No. 47 dt march 2007?.

Are thes etransaction violation of FEMA?. Kindly suggest or advise

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Showing Replies 1 to 1 of 1 Records

1 Dated: 26-3-2021

Please do check whether such paid amount can be converted in FDI or Equity or as additional capital invested.


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