Can an Indian Party/ Resident Indian acquire shares of a foreign entity without upfront payment or on a deferred payment basis? No, the provisions of Notification No.
Can a resident individual in India Acquire sell foreign securities without prior approval of the Reserve Bank?
Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for making overseas direct investments in a JV/WOS abroad.
Yes, there is a specific scheme, which permits acquisition by an eligible entity of shares of a foreign company engaged in a similar activity in exchange of issue of its own ADR/GDRs to the latter on an automatic basis.
Can an Indian party extend loan or guarantee to an overseas entity without any equity participation in that entity?
Note: Indian Party can extend Loan and guarantee by way of Automatic Route to an overseas entity only if there is already existing equity participation by way of direct investment in such overseas entity. If there is no equity holding of Indian Party, then Loan and Guarantee can be granted by way of RBI Approval.
Can an Indian individual invest in a foreign company?
An Indian individual must first come under the definitions of Resident Individual under FEMA to make an investment in a foreign company. The RBI or Reserve Bank of India has allowed the Resident Individual’s to make an investment in CCPS of the companies or its equity shares that is incorporated outside India.
Can a person resident in India hold or retain foreign currency?
In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such …
Can resident make payment on behalf of non-resident?
3.1 All dealings in foreign exchange or foreign security can be done only through an authorised person if permitted by FEMA, rules & regulations framed thereunder, or by general or special permission of the RBI. Further no payments can be made by a resident to a non-resident unless permitted under FEMA (section 3).
What is the difference between FDI and ODI?
FDI occurs when a non-resident invests in the shares of a resident company. ODI occurs when a resident company invests in a wholly-owned subsidiary or a joint venture in a non-resident country as part of a strategy to expand their business.
What is JV and WOS?
Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad. 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.
What are FEMA rules?
The Foreign Exchange Management Act, 1999 (FEMA), is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”.