TMI BlogIndian Direct Investment in Joint Ventures(JV)/ holly Owned Subsidiaries(WOS) outside IndiaX X X X Extracts X X X X X X X X Extracts X X X X ..... 2000" under clause (a) of sub-section (3) of Section 6 read with Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999). 2. In terms of the Regulations 6 and 7 of the Notification , Indian parties are permitted to make direct investment in Joint Venture (JV) or Wholly Owned Subsidiary outside India, subject to their complying with the conditions specified therein. Authorised dealers may allow remittance upto the permissible limit on receipt of an application in form ODA, in triplicate, together with form A-2, duly filled in, from the investing company. Before allowing the remittance authorised dealer should ensure that the necessary documents, as prescribed in form ODA, have been submitted. Immediately after the remittance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/entitlements like royalties, technical know-how fees, consultancy fees, etc. In such cases also the Indian party should be advised to submit details of the capitalisation in form ODAwhich should be forwarded by the designated branch of authorised dealer to the Regional Office of the Reserve Bank under whose jurisdiction it is functioning together with a report in form ODR . In this regard, it is clarified that the amount of investment by way of capitalisation of exports and other dues made in terms of Regulation 11 together with the investment made by way of market purchase of foreign exchange in terms of Regulation 6(3)(ii) should not exceed 25% of the net-worth of the Indian party as on the date of last audited balance sheet. In cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler after satisfying itself that no remittance has been effected through any otherauthorised dealer against the relative approval letter and after obtaining an undertaking from the party that all its future foreign exchange transactions relating to the JV/WOS shall be effected through this authorised dealer only. The investment by way of capitalisation of exports and other entitlements made by the Indian party in accordance with the approval obtained from Reserve Bank should also be reported in form ODR based on the information furnished by the party. 9. Remittance towards Earnest Money Deposit or Issue of Bid Bond Guarantee (a) In terms of Regulation 14 of the Notification dated 3 rd May, 2000 cited above, authorised dealers may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the pending investment proposals received by them before 31 st May 2000 under erstwhile EEFC Fast Track Route , in accordance with Regulation 6 of the Notification dated 3 rd May,2000 under reference and report the details of remittance in the form ODR [ instead of in form ODA-I prescribed under A.D.(M.A. Series) Circular No.33 dated 5 th November, 1999] along with formODA, in duplicate, in the existing format. 11.The directions contained in this Circular are issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999). Any contravention or non-observance of these directions is subject to the penalties prescribed under the Act. Yours faithfully, B. MAHESHWARAN Chief General Manag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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