Visakhapatnam Branch of SIRC 23 rd October 2008 Presentation on Outbound Investment- FEMA Provisions. Manoj C. Shah, [email protected] Shah & Modi Chartered Accountants. Introduction. Key driving factors Overseas expansion Overseas listing Spreading of Risk Ensuring supply chain
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Direct Investment by Indian Party
Drawal of Foreign Exchange upto 400% of Net Worth of the Indian Party.
Capitalisation of Exports (unrealized exports beyond prescribed period requires prior approval of Reserve Bank)
Guarantees (100% of the value to be considered) (guarantee not to be open ended)
Would require FIPB approval for Inbound leg of the Investment & Valuation by Merchant Banker
Proceeds of ADRs/ GDRs
ADR/GDR stock swap subject to the valuation norms and sectoral cap
Resources raised through ECB in conformity with parameters of the guidelines.
Utilization of FCCB peoceeds
Note: Limit of 400% net worth will not apply to utilization balances held in EEFC a/c & funds raised through ADR/GDR issue
Note: Financial services not defined. One can look at services in inbound notification Schedule I
Investment abroad by Individuals
Note: Individual partner can hold shares in their name if laws of foreign country do not permit firm to hold shares
in Foreign Securities
WEF 1/6/2007 there is only one Form which is ODI
Part I –for Automatic as well as Approval route
Part II - is for reporting of remittances by A.D.
Part III-Annual Performance Report (APR) To be filed with RBI within two months from the prescribed date which is Part III of form ODI.
Part IV- Report on closure/Disinvestment