New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Master Circular on Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad

FEMA - 11/2015-16 - Dated:- 1-7-2015 - RBI/2015-16/41 Master Circular No. 11/2015-16 July 01, 2015 To, All Authorised Dealer Category - I banks Madam / Sir, Direct investments by residents in Joint Venture (JV) and Wholly Owned Subsidiary (WOS) abroad are being allowed, in terms of clause (a) of sub-section (3) of section 6 of the Foreign Exchange Management Act, 1999, (42 of 1999) read with Notification No. FEMA.120/RB-2004 dated July 7, 2004, (GSR 757 (E) dated November 19, 2004), viz. Foreign .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d Persons and the Authorised Dealer Category - I banks may refer to respective circulars/ notifications for detailed information, if so needed. 3. This Master Circular is being updated from time to time as and when the fresh instructions are issued. The date up to which the Master Circular has been updated is suitably indicated. Yours faithfully, (K. Pandey) Chief General Manager INDEX Section A - General A.1 Introduction A.2 Statutory basis A.3 Prohibitions A.4 General Permission Section B - Di .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Trust / Society B.11 Post investment changes / additional investment in existing JV / WOS B.12 Restructuring of the balance sheet of the overseas entity involving write off of capital and receivables B.13 Acquisition of a foreign company through bidding or tender procedure B.14 Obligations of Indian Party B.15 Transfer by way of sale of shares of a JV / WOS B.16 Transfer by way of sale of shares of a JV / WOS involving Write off of the investment B.17 Pledge of Shares of JV/WOS B.18 Hedging of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r Banks 1 Designated branches 2 Investments under Regulation 6 of Notification No. FEMA 120/2004-RB dated July 7, 2004 3 General procedural instructions 4 Investments under Regulation 11 of Notification No. FEMA.120/2004-RB dated July 7, 2004 5 Allotment of Unique Identification Number (UIN) 6 Investment by way of share swap 7 Investments under Regulation 9 of Notification No. FEMA.120/2004-RB dated July 7, 2004 8 Purchase of foreign securities under ADR / GDR linked Stock Option Scheme 9 Remitt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lobal business by Indian entrepreneurs. Joint Ventures are perceived as a medium of economic and business co-operation between India and other countries. Transfer of technology and skill, sharing of results of R&D, access to wider global market, promotion of brand image, generation of employment and utilisation of raw materials available in India and in the host country are other significant benefits arising out of such overseas investments (or financial commitment). They are also important .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

les and simplifying the procedures both for current account as well as capital account transactions. A.2 Statutory Basis (1) Section 6 of the Foreign Exchange Management Act, 1999 provides powers to the Reserve Bank to specify, in consultation with the Government of India the classes of permissible capital account transactions and limits up to which foreign exchange is admissible for such transactions. Section 6(3) of the aforesaid Act provides powers to the Reserve Bank to prohibit, restrict or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

isition and transfer of a foreign security by a person resident in India i.e. investment (or financial commitment) by Indian entities in overseas joint ventures and wholly owned subsidiaries as also investment by a person resident in India in shares and securities issued outside India. Overseas Investment (or financial commitment) can be made under two routes viz. (i) Automatic Route outlined in paragraph B.1 and (ii) Approval Route outlined in paragraph B.7. A.3 Prohibitions Indian parties are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

financial products linked to Indian Rupee (e.g. non-deliverable trades involving foreign currency, rupee exchange rates, stock indices linked to Indian market, etc.) without the specific approval of the Reserve Bank. Any incidence of such product facilitation would be treated as a contravention of the extant FEMA regulations and would consequently attract action under the relevant provisions of FEMA, 1999. A.4 General Permission In terms of Regulation 4 of the Notification, general permission ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

In terms of Regulation 6 of the Notification, an Indian party has been permitted to make investment / undertake financial commitment in overseas Joint Ventures (JV) / Wholly Owned Subsidiaries (WOS), as per the ceiling prescribed by the Reserve Bank from time to time. An Indian party means a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932 or a Limited Liability Partnership (LLP) incorporated under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet) 2. (2) The Indian party should approach an Authorised Dealer Category - I bank with an application in Form ODI (Annex A) and prescribed enclosures / documents for effecting remittances towards such investments / financial commitments. (3) The total financial c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndian party provided the bank guarantee is backed by a counter guarantee / collateral by the Indian party. 50% of the amount of performance guarantee issued by the Indian party provided that the outflow on account of invocation of performance guarantee results in the breach of the limit of the financial commitment in force, prior permission of the Reserve Bank is to be obtained before executing remittance beyond the limit prescribed for the financial commitment. Foot note: Compulsorily Convertib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

constituents after ensuring that the laws of the host country permit incorporation of a company without equity participation by the Indian party. Indian entities may offer any form of guarantee - corporate or personal (including the personal guarantee by the indirect resident individual promoters of the Indian Party)/ primary or collateral / guarantee by the promoter company / guarantee by group company, sister concern or associate company in India provided that: i) All the financial commitments .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mitment, the Indian Party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation. iv) As in the case of corporate guarantees, all guarantees (including performance guarantees and Bank Guarantees / SBLC) are required to be reported to the Reserve Bank, in Form ODI-Part II. Guarantees issued by banks in India in favour of WOSs / JVs outside India, and would be subject to prudential norms, issued by the Reserve Bank (DBOD) from time to tim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Indian party. d) In case of partial / full acquisition of an existing foreign company, where the investment is more than USD 5 million, valuation of the shares of the company shall be made by a Category I Merchant Banker registered with SEBI or an Investment Banker / Merchant Banker outside India registered with the appropriate regulatory authority in the host country; and, in all other cases by a Chartered Accountant or a Certified Public Accountant. e) In cases of investment by way of swap of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s done by the firm, it will be in order for individual partners to hold shares for and on behalf of the firm in the overseas JV / WOS if the host country regulations or operational requirements warrant such holdings. g) An Indian party may acquire shares of a foreign company engaged in a bonafide business activity, in exchange of ADRs/GDRs issued to the latter in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he relevant regulations for such investment under FDI; (iv) Valuation of the shares of the foreign company shall be (a) as per the recommendations of the Investment Banker if the shares are not listed on any recognized stock exchange; or (b) based on the current market capitalisation of the foreign company arrived at on the basis of monthly average price on any stock exchange abroad for the three months preceding the month in which the acquisition is committed and over and above, the premium, if .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le on investments (or financial commitment) made in freely convertible currencies, as well as their sale / winding up proceeds are required to be repatriated to India in freely convertible currencies only. Investments / financial commitments in Pakistan by Indian Parties are permissible under the approval route. B.1.1 Issue of guarantee by an Indian Party to step down subsidiary of JV / WOS (a) Indian Parties are permitted to issue corporate guarantees on behalf of their first level step down op .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h guarantees will have to be reported to the Reserve Bank in Form ODI, as hitherto, through the designated AD Category - I bank concerned. (b) Further, the issuance of corporate guarantee on behalf of second generation or subsequent level step down operating subsidiaries will be considered under the Approval Route, provided the Indian Party indirectly holds 51 per cent or more stake in the overseas subsidiary for which such guarantee is intended to be issued. B.1.2 Investment (or financial commi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

king system circulated by the Reserve Bank/any other Credit Information company as approved by the Reserve Bank. Indian parties whose names appear in the Defaulters' list require prior approval of the Reserve Bank for the investment (or financial commitment). (ii) Setting up of an SPV under the Automatic Route is permitted for the purpose of making investment (or financial commitment) in JV/WOS overseas. B.2 Investment (or financial commitment) in unincorporated entities overseas in oil sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

entities overseas in the oil sector up to the limit prescribed provided the proposal has been approved by the competent authority and is duly supported by certified copy of the Board resolution approving such investment. Investment in excess of the prescribed limit shall require prior approval of the Reserve Bank. (3) Indian companies are also permitted to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ngly, these transactions may be reported by the Indian parties investing in the consortium to the AD Category-I banks in Form ODI for enabling on-line submission of the same by the AD Category-I banks to the Reserve Bank for allotment of Unique Identification Number. B.3 Method of Funding (1) Investment (or financial commitment) in an overseas JV / WOS may be funded out of one or more of the following sources: i) drawal of foreign exchange from an AD bank in India; ii) capitalisation of exports; .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

proceeds of foreign currency funds raised through ADR / GDR issues. In respect of (vi) and (vii) above, the limit of financial commitment vis-à-vis the net worth will not apply. However, all investments (or financial commitment) made in the financial sector will be subject to compliance with Regulation 7 of the Notification, irrespective of the method of funding. (2) General permission has been granted to persons resident in India for purchase / acquisition of securities in the following .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and other services within the ceilings applicable. Capitalisation of export proceeds remaining unrealised beyond the prescribed period of realization will require prior approval of the Reserve Bank. (2) Indian software exporters are permitted to receive 25 per cent of the value of their exports to an overseas software start-up company in the form of shares without entering into Joint Venture Agreements, with prior approval of the Reserve Bank. B.5 Investments (or financial commitment) in Financi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al from the regulatory authorities concerned both in India and abroad for venturing into such financial sector activity; and (iv) has fulfilled the prudential norms relating to capital adequacy as prescribed by the concerned regulatory authority in India. (2) Any additional investment (or financial commitment) by an existing JV/WOS or its step down subsidiary in the financial services sector is also required to comply with the above conditions. (3) Regulated entities in the financial sector maki .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mission. B.6 Investment in Equity of Companies Registered Overseas / Rated Debt Instruments (1)(i) Portfolio Investments by listed Indian companies Listed Indian companies are permitted to invest up to 50 per cent of their net worth as on the date of the last audited balance sheet in (i) shares and (ii) bonds / fixed income securities, rated not below investment grade by accredited / registered credit rating agencies, issued by listed overseas companies. (ii) Investment by Mutual Funds Indian Mu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

accredited/registered credit agencies; v) money market instruments rated not below investment grade; vi) repos in the form of investment, where the counterparty is rated not below investment grade. The repos should not, however, involve any borrowing of funds by mutual funds; vii) government securities where the countries are rated not below investment grade; viii) derivatives traded on recognized stock exchanges overseas only for hedging and portfolio balancing with underlying as securities; ix .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cumulatively up to USD 1 billion in overseas Exchange Traded Funds as may be permitted by SEBI. (3) Domestic Venture Capital Funds / Alternative Investment Funds3 registered with SEBI may invest in equity and equity linked instruments of off-shore Venture Capital Undertakings, subject to an overall limit of USD 500 million. Accordingly, Mutual Funds / Venture Capital Funds / Alternative Investment Funds desirous of availing of this facility may approach SEBI for necessary permission. (4) Genera .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ring such applications: (a) Prima facie viability of the JV / WOS outside India; (b) Contribution to external trade and other benefits which will accrue to India through such investment (or financial commitment); (c) Financial position and business track record of the Indian party and the foreign entity; and (d) Expertise and experience of the Indian party in the same or related line of activity as of the JV / WOS outside India. B.8 Investments in energy and natural resources sector Reserve Bank .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r the Foreign Trade Policy of the Ministry of Commerce and Industry, issued from time to time, the following revised terms and conditions are required to be complied with for considering the proposal of overseas direct investment (or financial commitment), by a proprietorship concern / unregistered partnership firm in India, by the Reserve Bank under the approval route: (a) The proprietorship concern / unregistered partnership firm in India is classified as Status Holder as per the Foreign Trade .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, engaged in the proposed business and has turnover as indicated; (d) The proprietorship concern / unregistered partnership firm in India has not come under the adverse notice of any Government agency like the Directorate of Enforcement, Central Bureau of Investigation, Income Tax Department, etc. and does not appear in the exporters' caution list of the Reserve Bank or in the list of defaulters to the banking system in India; and (e) The amount of proposed investment (or financial commitmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anks may forward the application to the Reserve Bank, after ensuring the above terms and conditions along with their comments and recommendations, for consideration. B.10 Overseas investment by Registered Trust / Society Registered Trusts and Societies engaged in manufacturing / educational / hospital sector are allowed to make investment (or financial commitment) in the same sector(s) in a JV/WOS outside India, with the prior approval of the Reserve Bank. Trusts / Societies satisfying the eligi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vestment should be approved by the trustee/s; iv) The AD Category - I bank is satisfied that the Trust is KYC (Know Your Customer) compliant and is engaged in a bonafide activity; v) The Trust has been in existence at least for a period of three years; vi) The Trust has not come under the adverse notice of any Regulatory / Enforcement agency like the Directorate of Enforcement, Central Bureau of Investigation (CBI), etc. (b) Society i) The Society should be registered under the Societies Registr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Regulatory / Enforcement agency like the Directorate of Enforcement, CBI etc. In addition to the registration, the AD Category - I bank should ensure that the special license / permission has been obtained by the applicant in case the activities require special license / permission either from the Ministry of Home Affairs, Government of India or from the relevant local authority, as the case may be. B.11 Post investment changes / additional investment (or financial commitment) in existing JV / W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oncerned in terms of local laws of the host country and include the same in the Annual Performance Report (APR - Part III of Form ODI) required to be forwarded to the AD Category-I bank. B.12 Restructuring of the balance sheet of the overseas entity involving write off of capital and receivables In order to provide more operational flexibility to the Indian corporates, the Indian promoters who have set up WOS abroad or have at least 51 per cent stake in an overseas JV, may write off capital (equ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he JV /WOS under the Approval Route. The write-off / restructuring have to be reported to the Reserve Bank through the designated AD Category-I bank within 30 days of write-off/ restructuring. The write-off / restructuring is subject to the condition that the Indian Party should submit the following documents for scrutiny along with the applications to the designated AD Category -I bank under the Automatic as well as the Approval Routes: a) A certified copy of the balance sheet showing the loss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with the provisions of Regulation 14 of the Notification. B.14 Obligations of Indian Party (1) An Indian party which has made direct investment abroad is under obligation to (a) receive share certificate or any other document as an evidence of investment, (b) repatriate to India the dues receivable from foreign entity, and (c) submit the documents / Annual Performance Report to the Reserve Bank, in accordance with the provisions specified in Regulation 15 of the Notification. The share certifica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estors in unincorporated entities in the oil sector. (3) Where the law of the host country does not mandatorily require auditing of the books of accounts of JV / WOS, the Annual Performance Report (APR) may be submitted by the Indian party based on the un-audited annual accounts of the JV / WOS provided: The Statutory Auditors of the Indian party certify that The un-audited annual accounts of the JV / WOS reflect the true and fair picture of the affairs of the JV / WOS and That the un-audited an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons: (i) the sale does not result in any write off of the investment (or financial commitment) made. (ii) the sale is effected through a stock exchange where the shares of the overseas JV/ WOS are listed; (iii) if the shares are not listed on the stock exchange and the shares are disinvested by a private arrangement, the share price is not less than the value certified by a Chartered Accountant / Certified Public Accountant as the fair value of the shares based on the latest audited financial st .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or any other regulatory authority in India. (2) The Indian party is required to submit details of such disinvestment through its designated AD category-I bank within 30 days from the date of disinvestment. B.16 Transfer by way of sale of shares of a JV / WOS involving Write off of the investment (or financial commitment) (1) Indian Party may disinvest, without prior approval of the Reserve Bank, in any of the under noted cases where the amount repatriated after disinvestment is less than the ori .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial commitment) in an overseas JV/WOS does not exceed USD 10 million. (2) Such disinvestments shall be subject to the conditions listed at B.15 items (ii) to (vi) and B 15.2. (3) An Indian Party, which does not satisfy the conditions laid down above for undertaking any disinvestment in its JV/WOS abroad, shall have to apply to the Reserve Bank for prior permission. 5B.17 Pledge of Shares of Joint Venture (JV), Wholly Owned Subsidiary (WOS) and Step down Subsidiary (SDS) An Indian Party may creat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under Regulation 18 of the Notification and A.P. (DIR Series) Circular No.54 dated December 29, 2014. B.18 Hedging of Overseas Direct Investments (1) Resident entities having overseas direct investments (or financial commitment) are permitted to hedge the foreign exchange rate risk arising out of such investments (or financial commitment). AD Category - I banks may enter into forward / option contracts with resident entities who wish to hedge their overseas direct investments (in equity and loa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l or with an Indian Party as defined in the Notification) satisfying the criteria as per Schedule V of the Notification, may make overseas direct investment in the equity shares and compulsorily convertible preference shares of a Joint Venture (JV) or Wholly Owned Subsidiary (WOS) outside India. The limit of overseas direct investment by the resident individual shall be within the overall limit prescribed by the Reserve Bank of India under the provisions of Liberalised Remittance Scheme, as pres .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in terms of the then extant / prevailing FEMA guidelines; (b) there is no change in the end use of the guarantee, i.e. the facilities availed by the JV / WOS / Step Down Subsidiary; (c) there is no change in any of the terms & conditions, including the amount of the guarantee except the validity period; (d) the reporting of the rolled over guarantee would be done as a fresh financial commitment in Part II of Form ODI, as hitherto; and (e) if the Indian party is under investigation by any inv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assets of its group company, sister concern or associate company in India, promoter and / or director] in favour of an overseas lender as security for availing of the fund based and/or non-fund based facility for its Joint Venture (JV) or Wholly Owned Subsidiary (WOS) or Step Down Subsidiary (SDS) outside India subject to the terms and conditions prescribed under Regulation 18A of the Notification and A.P. (DIR Series) Circular No.54 dated December 29, 2014. (2) An Indian party may create char .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition of foreign securities in certain cases (1) General permission has been granted to a person resident in India who is an individual - (a) to acquire foreign securities as a gift from any person resident outside India; (b) to acquire shares under cashless Employees Stock Option Programme (ESOP) issued by a company outside India, provided it does not involve any remittance from India; (c) to acquire shares by way of inheritance from a person whether resident in or outside India; (d) to purchas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of shares by eligible persons under this provision irrespective of the method of operationalisation of the scheme i.e where the shares under the scheme are offered directly by the issuing company or indirectly through a trust / a Special Purpose Vehicle (SPV) / step down subsidiary, provided (i) the shares under the ESOP Scheme are offered by the issuing company globally on a uniform basis, and (ii) an Annual Return (Annex B) is submitted by the Indian company to the Reserve Bank through the AD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ules / Regulations framed under Foreign Exchange Management Act, 1999, (ii) the shares are being repurchased in terms of the initial offer document, and (iii) an annual return is submitted through the AD Category - I bank giving details of remittances / beneficiaries, etc. (4) In all other cases, not covered by general or special permission, approval of the Reserve Bank is required to be obtained before acquisition of a foreign security. C.2 Pledge of a foreign security by a person resident in I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

prescribed as per the law of the host country where the company is located provided it does not exceed the limit prescribed for the resident individuals under the Liberalized Remittance Scheme (LRS) in force at the time of acquisition; (b) part / full consideration of professional services rendered to the foreign company or in lieu of Director s remuneration. The limit of acquiring such shares in terms of value is restricted to the overall ceiling prescribed for the resident individuals under t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ployee in a block of five calendar years; the shares so acquired do not exceed 5 per cent of the paid-up capital of the JV / WOS outside India; and after allotment of such shares, the percentage of shares held by the Indian promoter company, together with shares allotted to its employees is not less than the percentage of shares held by the Indian promoter company prior to such allotment; and (e) purchase of foreign securities under ADR / GDR linked stock option schemes by resident employees of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n permitted by the Reserve Bank for admission to the SWIFT User s Group in India as member. PART - II Operational Instructions to Authorised Dealer Banks 1. Designated branches An eligible Indian party making investment (or financial commitment) in a Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India is required to route all its transactions relating to the investment (or financial commitment) through one branch of an AD Category - I bank designated by it in terms of clause (v) of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tions on the request. However, the Indian party may designate different AD Category - I banks / branches of AD Category - I banks for different JV / WOS outside India. For proper follow up, the AD Category - I bank is required to maintain party-wise record in respect of each JV/ WOS. 2. Investments under Regulation 6 of Notification No. FEMA 120/2004-RB dated July 7, 2004 AD Category - I banks may allow investments (or financial commitment) up to the permissible limits on receipt of application .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nvestment (or financial commitment) in financial services sector, AD Category - I banks may certify that prior approvals from the Regulatory Authorities concerned in India and abroad have been obtained. Before allowing the remittance (or financial commitment), AD Category - I banks are required to ensure that the necessary documents, as prescribed in form ODI, have been submitted and found to be in order. 3. General procedural instructions (1) With effect from June 01, 2007, reporting system for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) Section F - Certificate by the Statutory Auditors of the Indian Party (to be retained by AD Category - I bank) Part II - Reporting of Remittances (or financial commitment) Part III - Annual Performance Report (APR) Part IV - Report on Closure/Disinvestment/Voluntary Liquidation/Winding up of JV / WOS (2) The revised form is only a rationalisation and simplification of the reporting procedure and there is no change or dilution in the existing eligibility criteria / documentation / limits. (3) W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

allotment of UIN, reporting of subsequent remittances (or financial commitment), filing of APRs, etc. AD Category -I banks would continue to receive the ODI forms in physical form, as stipulated in the A. P. (DIR Series) Circular No. 68 dated June 1, 2007, which should be preserved, UIN wise, for onward submission to the Reserve Bank, if specifically required. Transactions in respect of Mutual Funds, Portfolio Investment Scheme (PIS) and Employees Stock Options Scheme (ESOPS) are also required .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ne. c) The application for overseas investment (or financial commitment) under the approval route would continue to be submitted to the Reserve Bank in physical form as hitherto, in addition to the on-line reporting of Part I as contemplated above, for approval purposes. d) In case of disinvestment / closure / winding up / voluntary liquidation under the Automatic Route, in terms of A. P. (Dir Series) Circular No. 29 dated March 27, 2006, a report should continue to be submitted by the designate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e made and reported on-line in Part II, only after receipt of auto generated e-mail from RBI confirming the UIN. (4) In cases where the investment (or financial commitment) is being made jointly by more than one Indian party, form ODI is required to be signed jointly by all the investing entities and submitted to the designated branch of the AD Category - I bank. AD Category - I banks should file on-line a consolidated form ODI indicating details of each party. The same procedure should be follo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stated at para B 1 (3) (a) above, wherever the laws of the host country permit incorporation of a company without equity participation by the Indian party, AD banks may obtain prior approval from the Reserve Bank before allowing the remittances towards the loan/issue of guarantee to/on behalf of the overseas JV/WOS. 4. Investments (or financial commitment) under Regulation 11 of Notification No. FEMA.120/2004-RB dated July 7, 2004 In terms of Regulation 11 of the Notification, Indian parties ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itment prescribed in terms of Regulation 6. Further, in cases where the export proceeds are being capitalised in accordance with the provisions of Regulation 11, the AD Category - I banks are required to obtain a custom certified copy of the invoice as required under Regulation 12(2) and forward it to the Reserve Bank together with the revised form ODI. Capitalisation of export proceeds or other entitlements, which are overdue, would require prior approval of the Reserve Bank for which the India .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dentification Number to the overseas project. 6. Investment by way of share swap In the case of investment by way of share swap, AD Category - I banks are additionally required to submit to the Reserve Bank the details of transactions such as number of shares received / allotted, premium paid / received, brokerage paid / received, etc., and also confirmation to the effect that the inward leg of transaction has been approved by FIPB and the valuation has been done as per the laid-down procedure a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2004-RB dated July 7, 2004 In terms of Regulation 9, investment (or financial commitment) in JV / WOS in certain cases requires the prior approval of the Reserve Bank. AD Category - I banks may allow remittances under these specific approvals granted by the Reserve Bank and report the same to the Chief General Manager, Foreign Exchange Department, Central Office, Overseas Investment Division, Amar Building, 5th floor, Mumbai 400 001 in form ODI. 8. Purchase of foreign securities under ADR / GDR .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Notification, AD Category - I banks may, on being approached by an Indian party which is eligible for investment (or financial commitment) under Regulation 6, allow remittance towards Earnest Money Deposit (EMD) to the extent eligible after obtaining Form A2 duly filled in or may issue bid bond guarantee on their behalf for participation in bidding or tender procedure for acquisition of a company incorporated outside India. On winning the bid, AD banks may remit the acquisition value after obtai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hange Management (Realisation, Repatriation & Surrender of Foreign Exchange) Regulations, 2000 (cf. Notification No. FEMA 9/2000-RB dated 3rd May 2000), as amended from time to time. (ii) In cases where an Indian party, after being successful in the bid / tender decides not to proceed further with the investment, AD banks should submit full details of remittance allowed towards EMD / invoked bid bond guarantee, to the Chief General Manager, Foreign Exchange Department, Central Office, Overse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Indian party should report details of the disinvestment through the AD Category - I bank within 30 days of disinvestment in Part IV of the Form ODI as indicated in para 3 (3) (c) above. Sale proceeds of shares / securities shall be repatriated to India immediately on receipt thereof and in any case not later than 90 days from the date of sale of the shares / securities. 11. Verification of evidence of investment The share certificates or any other document as evidence of investment, where share .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ations stipulate that the investments (or financial commitment) into the country are required to be routed through a designated account, an Indian party is allowed to open, hold and maintain Foreign Currency Account (FCA) abroad for the purpose of overseas direct investments (or financial commitment) subject to certain terms and conditions stipulated under A.P. (DIR Series) Circular No. 101 dated April 02, 2012. Annex - D Schedule V [Please See Para B.19 of this Master Circular and Regulation 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dent individual and / or with an Indian party] located in the countries identified by the Financial Action Task Force (FATF) as "non co-operative countries and territories" as available on FATF website www.fatf-gafi.org or as notified by the Reserve Bank. The resident individual shall not be on the Reserve Bank s Exporters Caution List or List of defaulters to the banking system or under investigation by any investigation / enforcement agency or regulatory body. At the time of investme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

For the purpose of making investment under this Schedule, the valuation shall be as per Regulation 6(6)(a) of this Notification. The financial commitment by a resident individual to / on behalf of the JV or WOS, other than the overseas direct investments as defined under Regulation 2(e) read with Regulation 20A of this Notification, is prohibited. B. Post Investment Changes Any alteration in shareholding pattern of the JV or WOS may be reported to the designated AD within 30 days including repor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quiring the JV or WOS abroad. The disinvestment proceeds shall be repatriated to India immediately and in any case not later than 60 days from the date of disinvestment and the same may be reported to the designated AD. No write off shall be allowed in case of disinvestments by the resident individuals. D. Reporting Requirements The resident individual, making overseas direct investments under the provisions of this Schedule, shall submit Part I of the Form ODI, duly completed, to the designated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be reported by the designated AD to the Reserve Bank in Form ODI Part IV within 30 days of receipt of disinvestment proceeds. Appendix List of Circulars/Notifications consolidated in the Master Circular On Direct Investment in Joint Ventures/Wholly Owned Subsidiaries Abroad Notifications (published in the official gazette by the Government of India on various dates) Sl. No. Notification No. Date 1. FEMA.120/RB-2004 July 07, 2004 2. FEMA.132/2005-RB March 31, 2005 3. FEMA.135/2005-RB May 17, 2005 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arch 19, 2013 18. FEMA.277/2013-RB May 08, 2013 19. FEMA.283/RB-2013 August 14, 2013 20. FEMA.299/RB-2014 March 24, 2014 21. FEMA.314/RB-2014 July 03, 2014 22. FEMA.322/2014-RB October 14, 2014 23 FEMA.325/RB-2014 November 12, 2014 24. FEMA.326/RB-2014 November 12, 2014 A.P. (DIR Series) Circulars Sl. No. Circular No. Date 1. AP (DIR Series) Circular No.14 October 01, 2004 2. AP (DIR Series) Circular No.32 February 09, 2005 3. AP (DIR Series) Circular No.42 May 12, 2005 4.. AP (DIR Series) Circu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lar No.68 June 01, 2007 15. AP (DIR Series) Circular No. 72 June 08, 2007 16. AP (DIR Series) Circular No.75 June 14, 2007 17. AP (DIR Series) Circular No.76 June 19, 2007 18. AP (DIR Series) Circular No. 11 September 26, 2007 19. AP (DIR Series) Circular No. 12 September 26, 2007 20. AP (DIR Series) Circular No. 34 April 03, 2008 21. AP (DIR Series) Circular No. 48 June 03, 2008 22. AP (DIR Series) Circular No. 53 June 27, 2008 23. AP (DIR Series) Circular No.07 August 13, 2008 24. AP (DIR Seri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version