Foreign Exchange Management Act

FDI is an investment from a party in one country into a Business/ Company/ Corporation in another country, with an intention of establishing a lasting interest. The types of FDI are Horizontal, Vertical, Conglomerate and Platform investments.

Further, FDI can take two different forms of investments (viz) Green Field and Mergers & Acquisitions. Foreign Investors, Institutional Investors are allowed to invest in Portfolio investments.

Investment made by non-resident entities and Investment made by companies controlled by non-resident entities are also allowed.

However FDI is prohibited in the following sectors:

• Nidhi Company & Chit Funds
• Betting, Gambling & Lottery business
• Real Estate & Farm Houses
• Manufacturing of tobacco products
• Some Agricultural Components / Ventures
• TDRS- Trading in Transferable Development Rights

Furthermore, FDI is allowed in the following sectors:

• Infrastructure & Construction
• Credit information Companies
• Public Sector banks
• Print Media, News and current affairs
• Telecom Sector
• Reconstruction of Companies
• Investment in Retail Trading. ( single & multiple )

Our Firm provides effective support in planning and guidance relates to execute the Investments within the legal frame work of FEMA and GOI. Our Firm ensures all your transaction in this regard are adhered to FEMA & RBI Regulations.

• External Commercial Borrowings are loans / bonds / or other financial instruments received from foreign & non-resident lenders in foreign currency.
• This is used as an instrument by Big Companies to raise money from abroad for their business expansion / modernization & development.
• Trade credits is a type of short term loan arrangement between the buyer and the supplier.
• For ECB, a company must meet its eligibility criteria as prescribed by RBI.
• RBI also responsible for setting limits on the amount and the purpose and use of their borrowings.
• Our firm provides befitting advice to the companies on eligibility criteria, amount of borrowings and end use.
• Our firm also provides support for submission of all necessary documents / returns for ECB and Trade Credits.

FEMA regulates all cross- border transactions such as Investments, Ventures, Borrowings and Trade Credits. Our firm provides unparalleled support in effective planning and guidance relates to execute the transactions within the legal framework of FEMA. And our firm also ensures that all your cross- border transactions are adhered to FEMA & RBI Regulations.

Remittances of incomes like

• Rent,
• Dividend,
• Pension,
• Interest,
• Sale proceeds...&
• All eligible Remittances are allowed by LRS, with a prescribed ceiling in total amount of remittances in a year and the limitation on repeated remittances by a member of the same family.
• Students going abroad for studies are eligible to receive Remittances from India.
• Our Firm offers reliable FEMA Advisory & Compliance Services to the clients and their eligible remittances.

• Investments can made under the Automatic route or the Approval route of Government of India / RBI by contributing to the capital of the foreign companies and by subscribing to the memorandum of foreign company or by purchasing the shares of foreign entities.
• These investments are subject to the notifications and regulations prescribed by RBI from time to time.
• Acquisition of property:-
• Residents are permitted to buy or obtain property through purchase, inheritance and gift.
• Indian entities who have office outside India are allowed to acquire a property outside India.
• Our firm offers the guidance and ensures the overseas investments and Acquisition of property transactions are strictly in accordance with the regulations set by FEMA & RBI.

Remittances of income like

• Rent,
• Dividend,
• Pension,
• Interest,
• Can be made easily as per the norms and regulations set by FEMA and RBI.
• The facilities extended to NRIs are also equally applicable to students going abroad for studies.
• Educational loans and other loans availed by these students as residents of India will continue to be available as per existing FEMA Regulations.
• Remittance for Medical Treatment in abroad also be allowed by FEMA
• OCI card holders can purchase residential and commercial Properties in India subject to norms set by FEMA & RBI.
• Our firm offers consultancy services and guidance to NRIs, OCIs & PIOs to execute their transactions and remittances to ensure strictly adherence to FEMA & RBI Regulations.

• Direct Investments by Residents in JVs and WOS abroad are being allowed under section 6 of FEMA 1999 and vide RBI Notifications NO 120 of 2004 under Automatic Route through SPV and Capitalization of exports and other dues.
• Direct Investments by Residents, Proprietorship firms, Registered Trust / Society in JVs and WOS are allowed as per the norms prescribed by FEMA & RBI.
• Our Firm provides strategic planning, guidance for these investments and ensures the strict adherence of FEMA / RBI Regulations prescribed from time to time.

• Our Firm Provides strategic planning and proper guidance as per the norms prescribed by FEMA & RBI to set up Representative Office / Liaison Office by foreign entities to understand the business climate and to explore the investment opportunities in India.
• Wherein the Foreign Company takes over a project in India and at the place of project a Project Office can be setup to represent the interests of the foreign company executing the project.
• And the foreign company can also set up a Branch Office at a different location apart from the place of business to facilitate the foreign company executing the project.
• Our firm provides unparalleled support to the companies from abroad to step in their business efforts and to explore the investments opportunities in India.

• Administration of Forex Transaction is provided by FEMA 1999.
• The service provided by FFMCs is essential for travelers, importers, exporters and those engaged in International businesses, enabling them to obtain foreign currency and convert their surplus foreign currency into domestic currency.
• Our Firm offers consultancy and helps FFMCs to adhere to the Rules and Regulations prescribed by FEMA / RBI.
• Any non-adherence of these prescribed Rules & Regulations or any violations are to be considered as contraventions.
• These contraventions are compounded by the competent Authority and closed by imposing Penalties.
• Our firm provides support and guidance to FFMCs to complete the compounding procedure smoothly.

• Organizations require Government’s permission to receive funding’s from abroad.
• FCRA is enacted to regulate the receipt of foreign contributions / funding’s by Individuals, Associations and Companies & Corporations into India and its proper utilization.
• Donations should be received only through specified bank branch by the registered organizations.
• As per FCRA foreign donations cannot be transferred to any other person
• Our firm provides unparalleled support for effective planning and guidance on receiving donations from abroad.
• Our firm ensures the adherence of FEMA guidelines and RBI Regulations in such transactions.

• In India, Foreign Exchange Policy is closely tied to the Foreign Exchange Management Act.
• RBI issues circulars, notifications and Regulations upon foreign exchange transactions from time to time.
• One has to adhered to the instructions / Regulations of RBI, when a foreign exchange transaction is executed.
• Violation of the norms related to such transactions knowingly or unknowingly, will be considered as contravention and for seeking redressal the company has to undergo a compounding procedure.
• Our firm provides support and guidance to companies to complete the compounding procedure smoothly.
• Our firm ensures the consultancy relates to comply with FEMA & RBI guidelines with effective compliance strategies.

• Compounding Procedure refers to a process wherein the applicant is voluntarily admitting the contravention, pleading guilty and seeking redressal.
• As per FEMA, the Reserve Bank has got the power to compound the contraventions made by the applicants.
• Our firm provides unparalleled support & guidance to identify the contraventions made by the companies.
• Our firm provides support to the companies to apply for compounding with Reserve Bank of India (who has the authority to compound the contraventions).
• Our firm provides support and guidance to FFMCs to complete the compounding procedure smoothly.