Table of Contents
- 1 Can an Indian company invest in a foreign company?
- 2 Is foreign investment legal in India?
- 3 Is FEMA still in force in India?
- 4 How can an Indian company receive foreign investment *?
- 5 In which sectors FDI is not allowed in India?
- 6 What are the restricted areas for foreign direct investment in India?
- 7 Can an Indian company acquire immovable property outside India?
- 8 Who controls FEMA?
- 9 What did the Reserve Bank of India do under FEMA?
- 10 Who is in charge of FEMA compliance in India?
- 11 What does FEMA mean for cross border mergers?
Can an Indian company invest in a foreign company?
An Indian company can make overseas investment in any activity (except those that are specifically prohibited) in which it has experience and expertise.
Is foreign investment legal in India?
Under the automatic route, foreign investment in India is allowed without prior approval from the Government of India or the Reserve Bank of India (RBI) in all activities or sectors, as mentioned in Regulation 16 of FEMA Regulations, 2017.
Can Indian company buy property abroad?
RBI regulations permit Indian companies, LLPs and registered partnerships (Indian Entities) to invest in the equity of or set up foreign companies, which can then purchase real estate abroad.
Is FEMA still in force in India?
Is FEMA still in force in India? Yes, still in force in India. The Foreign Exchange Management Act (FEMA) was created in 1999 to replace the outdated Foreign Exchange Regulation Act (FERA) of 1973. FEMA was a modernisation of the Indian economy and created to liberalise and deregulate the Indian market.
How can an Indian company receive foreign investment *?
Answer: The amount of consideration for all investment by an FVCI has to be received/made through inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Special Non-Resident Rupee (SNRR) account maintained by the FVCI with an AD bank in India.
What is the difference between ODI and FDI?
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.
In which sectors FDI is not allowed in India?
The present policy prohibits FDI in the following sectors: Gambling and Betting. Lottery business (including government/ private lottery, online lotteries etc) Activities /sectors not open to private sector investment (eg, atomic energy /railways)
What are the restricted areas for foreign direct investment in India?
The table below summarises FDI in key INDIAN sectors:
| Sector/Industry | FDI Cap | Approval route |
|---|---|---|
| Pharmaceuticals – Brownfield | 100% | Automatic up to 74% Government beyond 74% |
| Manufacturing of medical devices | 100% | Automatic |
| Hospitals Sector | 100% | Automatic |
| Petroleum and Natural Gas |
Can I buy property in USA as an Indian?
Anyone can buy property in the US, regardless of their citizenship.
Can an Indian company acquire immovable property outside India?
Answer: Immovable property can be acquired outside India: Under section 6(4) of FEMA. Jointly with a relative provided there are no outflow of funds from India. By an Indian company having overseas offices, for housing its business or for residence of staff.
Who controls FEMA?
the U.S Department of Homeland Security
FEMA is a federal agency within the U.S Department of Homeland Security (DHS). The FEMA administrator reports directly to the DHS Secretary. The administrator also has a direct line of access to the U.S. President during periods of disaster response.
How does FEMA work in India?
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”.
What did the Reserve Bank of India do under FEMA?
1. Introduction 1.1 The Foreign Exchange Management Act, 1999 (FEMA) empowers the Reserve Bank to frame regulations to prohibit, restrict or regulate transfer or issue of any security by a person resident outside India.
Who is in charge of FEMA compliance in India?
FEMA compliance and the regulations made thereunder are governed by the apex bank of India named as “Reserve Bank of India (RBI)”. It has been witnessed that Foreign Direct Investment (‘FDI’) inflows increase every year. Recently, Indian companies are globally investing.
Which is not considered as investment vehicle under FEMA 20?
2.14.1 A Venture Capital Fund (VCF) established in the form of a trust or a company or a body corporate and registered under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 will not be considered as an Investment Vehicle for the purpose of FEMA 20 (R) and this Master Direction.
What does FEMA mean for cross border mergers?
The FEMA Regulations cover both inbound and outbound investments. The term “Inbound Merger” means a Cross Border Merger where the Resultant Company is an Indian company whereas “Outbound Merger” means a Cross Border Merger where the Resultant Company is a Foreign Company.