FDI SERVICES
Foreign Direct Investment
“FDI” or “Foreign Direct Investment” means investment through equity instruments by a person resident outside India in an unlisted Indian company; or in ten per cent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.
How FDI works in India:
Example: A US based technology company XYZ INC invests and acquires majority stake in an Indian company ABC Pvt. Ltd. to boost its research & development. Some of the benefits which encourages the foreign investors to involve in FDI are Market diversification, local expertise, lower labour costs, Tax incentives, etc.
“FDI” or “Foreign Direct Investment” means investment through equity instruments by a person resident outside India in an unlisted Indian company; or in ten per cent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.
How FDI works in India:
Example: A US based technology company XYZ INC invests and acquires majority stake in an Indian company ABC Pvt. Ltd. to boost its research & development. Some of the benefits which encourages the foreign investors to involve in FDI are Market diversification, local expertise, lower labour costs, Tax incentives, etc.
In addition to the foreign investors, Foreign Direct Investment (FDI) is a major driver of economic growth and an important source of non-debt finance for the economic development of the country.
Reporting requirements under FDI
Steps for filing in on FIRMS Portal
Reporting requirements for each type of filing like FC-GPR, FC-TRS, LLP, DRR etc.
Reporting requirements under FDI
Steps for filing in on FIRMS Portal
Reporting requirements for each type of filing like FC-GPR, FC-TRS, LLP, DRR etc.
Overseas Direct Investment
ODI means investments, by way of contribution to the capital or Subscription to the Memorandum of a foreign entity or by way of Purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange but does not include Portfolio Investment.
How ODI works in India:
Example 1: Indian Company ABC Pvt. Ltd. engaged in Smart Phone manufacturing business sets up an overseas company to expand its operations and leverage on the cheap labour costs of the host country.
Example 2: Mr. X, a resident individual finds potential in an overseas company and wants to invest and contribute to the growth of the company.
Any Indian Party which intends to make an overseas direct investment shall approach a designated Authorised Dealer for making the remittance/investment along with duly filled form ODI Part I along with the supporting documents like Board Resolution, Statutory Auditor Certificate, etc. Once the AD Bank scrutinises and approves the documents as per the regulatory guidelines, the remittance/investment will be processed. A Unique Identification Number (UIN) will be generated for the particular JV/WOS before the first remittance, and the same UIN shall be used for further investments/remittances in the JV/WOS.
What is considered as Indian party
Eligible limits for financial commitment and Liberalized Remittance Scheme
ODI means investments, by way of contribution to the capital or Subscription to the Memorandum of a foreign entity or by way of Purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange but does not include Portfolio Investment.
How ODI works in India:
Example 1: Indian Company ABC Pvt. Ltd. engaged in Smart Phone manufacturing business sets up an overseas company to expand its operations and leverage on the cheap labour costs of the host country.
Example 2: Mr. X, a resident individual finds potential in an overseas company and wants to invest and contribute to the growth of the company.
Any Indian Party which intends to make an overseas direct investment shall approach a designated Authorised Dealer for making the remittance/investment along with duly filled form ODI Part I along with the supporting documents like Board Resolution, Statutory Auditor Certificate, etc. Once the AD Bank scrutinises and approves the documents as per the regulatory guidelines, the remittance/investment will be processed. A Unique Identification Number (UIN) will be generated for the particular JV/WOS before the first remittance, and the same UIN shall be used for further investments/remittances in the JV/WOS.
What is considered as Indian party
Eligible limits for financial commitment and Liberalized Remittance Scheme
External Commercial Borrowings
External Commercial Borrowings or ECB are commercial loans raised by eligible resident entities from recognized non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
How ECB works in India:
Resident entities can raise ECB in INR or any freely convertible Foreign Currency. ECBs can be raised under the automatic route as well as the approval route, under the ECB framework. Under Automatic Route, the AD Category-I Bank examines the case and gives the approval. Entities wanting to raise ECB under the automatic route may approach an AD Category-I Bank like ICICI Bank with their proposal along with a duly filled Form ECB.
Under Approval Route, prospective borrowers send in their requests to the RBI through their AD Category-I Banks for examination.
Eligible borrowers to raise ECBs
Advantages of ECBs and its applicability for Startups
External Commercial Borrowings or ECB are commercial loans raised by eligible resident entities from recognized non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
How ECB works in India:
Resident entities can raise ECB in INR or any freely convertible Foreign Currency. ECBs can be raised under the automatic route as well as the approval route, under the ECB framework. Under Automatic Route, the AD Category-I Bank examines the case and gives the approval. Entities wanting to raise ECB under the automatic route may approach an AD Category-I Bank like ICICI Bank with their proposal along with a duly filled Form ECB.
Under Approval Route, prospective borrowers send in their requests to the RBI through their AD Category-I Banks for examination.
Eligible borrowers to raise ECBs
Advantages of ECBs and its applicability for Startups