Taxmann's FEMA & FDI Ready Reckoner with Guide to Overseas Investment

ACRONYMS USED IN FEMA & FDI

I-9

I-10

I-11

I-12

I-13

-

I-14

OVERSEAS INVESTMENT BY INDIAN ENTITY

32.1 Background

-

Direct Investment by Indian Resident in JV/WOS outside India

Acquisition and transfer of immovable property by Indian resident outside India

32.1-1 Liberalisation of policy in respect of Investment by Indian Entitites outside India

32

-285

32.1-2 Legal framework of new Overseas Investment Policy

FEM (Overseas Investment) Rules, 2022 vide RBI Regulations, 2022 RBI Directions, 2022 -

32.1-3 Highlightsof 2022 Rules, Regulations and Directions -

-

Para

286

32.1

-i.e. -

32.1-4 Administration of FEM (Overseas Investment) Rules, 2022

32.1-5 Automatic Route for OI i.e. Non-applicability of Overseas Investment (OI) rules and regulations relating in certain cases

a 287 Para 32.1

32.1-6 Overriding powers of RBI to restrict overseas financial commitment -

32.1-7 Overriding powers of Central Government and RBI to allow investment above limits -

32.1-8 Central Government can prohibit OI in specified countries -

32.1-9 Continuity of investments or financial commitments made upto 22-8-2022

b -

-

288

Para 32.1

32.1-10 Prohibition on investment or financial commitment outside India, except as provided in FEM Act and Rules -

32.2 Overseas Investment bona fide -

Meaning of ‘Financial Commitment’ -

32.2-1 Foreign Entity -

Meaning of ‘Limited Liability’

32.2-2 Strategic Sector

289 Para 32.2

RBI instructions in respect of strategic sector

32.2-3 Investment only in foreign entity engaged in bona fide business activity bona fide -

Meaning of ‘bona fide business activity’ bona fide , Explanation

Subsidiaryi.e.

Host Country or Host Jurisdiction

Strategic sector

Para 32.2 290

32.3 Meaning of ‘Financial Commitment’

32.3-1 Financial commitment by Indian entity by modes other than equity capital-

Meaning of ‘Indian Entity’ -

32.3-2 Financial commitment by Indian entity by way of debt

RBI directions in respect of Financial commitment by way of debt

-

291 Para 32.3

32.3-3 Financial commitment by way of guarantee for Overseas Investment

Guarantee by group company

Explanation

No open ended guarantee

Guarantee invoked will be considered as lending -

Joint guarantee will be considered as 100% guarantee by each guarantor

Performance guarantee will be reckoned as 50% commitment -

bona fides

Para 32.3 292

Roll over is not fresh commitment

RBI directions in respect of financial commitment by way of guarantee a b c d e

32.3-4 Financial commitment by way of pledge or charge a

-

293 Para 32.3

Providedproviso

Meaning of ‘PFI’ and negative pledge

Summary of provisions relating to financial commitment by way of pledge/ charge RBI directions in respect of pledge/charge

b

Para 32.3 294

32.3-5 Acquisition or transfer of equity capital by way of deferred payment -

Conditions and procedure for acquisition or transfer by way of deferred payment - bona fides -

-

295 Para 32.3

-

32.4 Overseas Portfolio Investment

Meaning of ‘Equity Capital’ e 32.4-1 Directions of RBI in respect of OPI a

-

Para 32.4 296

b i.e. c

e f g 32.4-2 Meaning of debt instruments i ii iii iv v 32.4-3 Meaning of Non-debt instruments i ii iii iv

d

297 Para 32.4

32.4-4 Manner of making Overseas Portfolio Investment by an Indian entity iii iv v vi Net Worth 57 pListed and Unlisted Indian Companyn

v vi i.e. vii viii ix

298

32.5 No Objection Certificate requirement from Bank or regulatory authority in certain cases i ii iiiPara 32.5

299 Para 32.6

provisob 32.6 Pricing guidelines for issue or transfer of equity of a foreign entity1 b Meaning of ‘Equity Capital’ e vii 32.6-1 RBI directions in respect of Pricing Guidelines

inter alia iii bona ﬁdes

32.7 Transfer of investment or liquidation

iii-

Para

32.7 300

Meaning of ‘Disinvestment’ d

RBI directions in respect of transfer or liquidation32.8 Restructuring of ODIl -

-

b 301 Para 32.8

32.8-1 RBI directions in respect of Restructuring -

32.9 Restrictions and prohibitions in ODI or Financial Commitment a b c -

RBI directions in respect of Restrictions and prohibitions under rule 19(1)-

32.9-1 Investment in start-ups only from internal accruals

302

Para 32.9

Resident Individual u

Procedure and conditions for ODI in start-ups -

32.9-2 Restrictions on making financial commitment in foreign entity with structure more than two layers of subsidiaries a b fc d proviso

32.9-3 RBI directions in respect of Restrictions on layers of subsidiariesi.e.

32.10 Manner of making Overseas Direct Investment by Indian entity

303 Para 32.10

FEMA & FDI

Reckoner with Guide

:

DATE OF PUBLICATION : DECEMBER 2022 EDITION : 18TH EDITION ISBN NO : 9789356225220 NO.OF PAGES : 566 BINDING TYPE : PAPERBACK DESCRIPTION This

information

The

• [Topic-wise

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Circulars,

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•

• Foreign

• Conservation

Exchange

Activities Act

ORDER NOW Rs. 1395 USD 49

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to Overseas Investment AUTHOR : TAXMANN PUBLISHER

TAXMANN

book provides complete and accurate

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key features of this book are as follows:

Commentary] on 50+ topics

[Analysis] with relevant Rules, Judicial Pronouncements,

Notifications and Master

issued by the Reserve Bank of India

Guide to Overseas Investment

Law Relating to the following

Prevention of Money Laundering Act (PMLA)

Contribution (Regulation) Act (FCRA)

of Foreign

and Prevention of Smuggling

(COFEPOSA)

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