fema booklet

7/28/2019 FEMA Booklet

1/16

HASSLE FREECOMPLIANCE WITH

FEMA PROVISIONS

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9 0 8 , A d i t y a B u i l di n g ,

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2/16

Disc laim er:E v e r y ef f o r t h a s b e e n m a d e to a v o i d e r r o r s o r o m i ss i o n s i n

t h i s pu b l i c at i o n . I n s p i t e o f t hi s , e r r o r s m a y cr e e p i n . A n y

m i st a ke , e r r or o r d i sc r ep a nc y no t ed m a y b e br o ug h t t o

o ur n ot ic e wh ic h s ha ll b e t ak en c ar e of i n t he n ex t

e di ti on . I t i s n o ti fi ed t ha t n ei th er t he p ub li sh er n or t he

a u t h or o r s e l l er w i l l be r e s p on s i b le f o r a n y d a ma g e o r l o s s

o f a ct io n t o a ny on e, o f a ny ki nd , i n a ny ma nn er,

t he re fr om . I t i s s ug ge st ed t ha t t o a vo id a ny do ub t t he

r ea de r s ho ul d c ro ss -c he ck al l t he fa ct s, l aw s a nd

contents of the publication w ith original Governm entP u b l i ca t i o n o r n o t i fi c a t i on s .

N o p a rt o f th i s bo o k m a y b e re p ro d uc e d o r c o pi e d i n a n y

m a nn e r o r b y a n y m ea n s w it h ou t t h e p r io r p e rm i ss i on o f

t h e p u bl i s h e rs . B r e a c h o f t h is c o n di t i o n i s l i a bl e f o r l e g a l

action.

All disputes are subject to Ahm edabad Jurisdiction.

P ri c e : R s . 1 0 0/ -

Publ ished by:Ba g a d iya & J a in Ad visory Services9 0 8, A d it y a B u il d in g , O p p S a rd a r P at e l S e va S a m a j,N r. G r u h F i na n ce , O f f C . G . Ro a d, N a vr a ng p u ra ,A h m e d ab a d 3 8 0 0 07

Te l: + 91 7 9 3 00 2 7 65 1, 4 00 7 0 86 7, + 91 7 60 00 2 76 51

Printed by :

W e w e l c om e y o u r s u g ge s t i on s / f ee d b ac k a t t i r t he s h @b a g ad i y a nj a i n .c o m

S i mp l if i ca t io n o f p o r tf o li o i n ve s to r n o rm s

R at io na li za ti on o f t he f or ei gn i nv es tm en t r eg im e b y

i n d i c at i o n s t h at t h e r e g u la t o r y f r am e w o r k m ay s h i f t f r o m ac l a s s if i c a t io n - b as e d r e g i me t o a r e g i m e b a s e d o n i n v e s tm e n t

size thereby clearing the overlap betw een FIIs, QFIs & FDI.

F I Is w i l l be p e r mi t te d t o p a rt i ci p at e i n t h e E xc h an g e Tr a de d

C u rr e nc y D e r iv a ti v e S eg m en t t o t h e e xt e nt o f t h ei r I n di a n

rupee exposure in India.

F II s wi ll als o b e p er mi tt ed to u se th ei r i nv es tme nt i n

Corporate Bonds and Governm ent S ecurities as collateral to

m e e t t h e i r m a r g in r e q u i r em e n t s.

D es ig na te d d ep os it or y p ar ti ci pa nt s wi ll b e a ll ow ed t o

r e gi s te r d i ff e re n t c l as s es o f p o r tf o li o i n ve s to r s, s u bj e ct t o

c o m p li a n c e w i t h K Y C g u i d el i n e s i s s u e d b y S E B I.

A n n o u n ce m e n t s m a de i n t h e B u d g e t 2 0 1 3

27

S a ha j an a nd a m t h e P r i nt S h op - A h me d ab a d


3/16

A Guide to FEMA

W i t h t h e l i b e r al i z a t io n o f t h e I n d i an Ec o n o my an d re p l a c em e n t o fs t ri n ge n t F o re i gn E x ch a ng e R eg u la t io n A c t ( F ER A ) b y a s i mp l erF or ei gn E xc ha ng e M an ag em en t A ct ( FE MA ), I nd ia h as n ow

b e c o me a h i g h ly a t t r a c t iv e d e s t in a t i on f o r f o r ei g n i n v e s t or s / N R Is t op ar k th ei r f un ds b y wa y of I nv es ti ng i n In di a i n Bu si ne ssO rg an is at io ns , I nd ia n C ap it al M ar ke t, B an ki ng i nd us tr y e tc .A c c or d i n g ly , t h e m u c h r e q u ir e d i n f l o ws o f f o r e ig n ex c h a ng e h a v es e en a r a pi d su r ge i n t h e r e ce n t y e ar s . C o mp l yi n g w i th th i s l a w i sa l so v e ry c r u ci a l f r om a m o ne t ar y a s p ec t a s n o n- c o mp l ia n ce o f t h es ame w ou ld l ead t o h ug e am oun t of p en al ti es . Re ce nt ly, t heE n fo r ce m en t D i re c to r at e ( E D) , a h i gh e r l e ve l a u th o ri t y u n de r F E MAh a s s l ap p ed a R s . 9 8 .5 c r or e p e na l ty n ot i ce t o I P L t e am R aj a st h anR oy al s f or b ei ng a cc us ed o f v i ol at in g t he F or ei g n E xc ha ng e l aw

p r o v is i o n s . T h i s b o o kl e t t h u s w o ul d g u i d e y o u t h r ou g h t h e b a s i c s o fF E M A & t h e c o m p l i a n c e r e q u i r e me n t t h e re o n .

INDEX

Sr .No .

Part iculars Page No

1 Re si de nt ia l St atu s 01

2 Typ es o f Tra nsactio ns 033 De po si ts b y perso n re side nt ou tsid e I nd ia 06

4 E xp ort of Goo ds & S ervices 08

5 Re al izati on & rep atri at ion o f fo re ign e xcha ng e 12

6 I mp ort of Goo ds & Services 13

7 F ore ig n I nvestmen t i n I nd ia 14

8 E sta bl ishmen t o f a p la ce o f b usin ess i n Ind ia 20

9 A cq ui si tio n & Tr an sfe r o f Immovab le Pro pe rty i n 24

In d ia b y a p e rso n re sid en t o u tsid e In d ia10 A cq ui si tio n & Tr an sfe r o f Immovab le Pro pe rty 26

o u tsid e In d ia b y a p e rso n re side n t in In d ia

11 L ib era li se d Re mitta nce Sche me (L RS) 26

12 A nn ou ncemen ts mad e i n the Bu dg et 20 13 27


4/16

A . P e r so n R e s i de n t i n I n d i a m e a n s t h e f o ll o w i ng [ Se c t i o n 2 (v ) ] :

(a)t h e c o u rs e o f t h e p r e c ed i n g f i n a nc i a l y e a r. H o w e ve r, i t d o e sn ot i nc lu de a p er so n w ho h as go ne o ut o f I nd ia o r s ta yso ut si d e I nd ia f or e mp lo ym en t o ut si de I nd i a o r c ar ry in g o nb u s i ne s s o r v o c a t i o n ou t s i de I n d i a o r f o r a n y o th e r p u r p os e ,in such circumst ances as would indicat e his int ent ion t os t a y o u t s i d e I n d i a f o r u n c er t a i n p e r i o d.

( b) A p er so n re si d in g i n In di a f or m or e t ha n 18 2 d ay s du ri ngt h e c o u rs e o f t h e p r e c ed i n g f i n a nc i a l y e a r. H o w e ve r, i t d o e sn o t i n cl u de a p e rs o n w h o h a s c o me t o o r s t ay s i n I n di a , i ne i t h er c a s e o t h e r w i s e t h a n ( i ) H e h a s c o m e f o r e m p l oy m e n ti n I nd i a o r ( i i ) f o r c a r r yi n g o n b us i n e s s o r v o c a ti o n i n I n d i a o r( i i i ) f o r a n y o t h er p u r p os e , i n s u c h c i r cu m s t an c e s a s w o u ldi n d i ca t e h i s i n t e n ti o n t o i n I n d i a f o r a n u n c e r ta i n p e r i o d.

( c ) A n y p er s on o r b o dy c o r p or a te r e gi s te r ed o r i n co r po r at e d i nIndia

( d ) A n o ff i ce , b r an c h or a g en c y in I n di a o w ne d o r c o n t ro l l ed b ya p e r s on r e s i d en t o u t s id e I n d i a

( e) A n o ff ic e, b ra nc h o r a ge nc y o ut si de I nd ia o wn ed o rcont rolled by a person resident in India

Largely, 'p erson resid ent of Ind ia' includ es p erson of Ind ia (excep t

t h os e s ta y in g a b ro a d f o r w o rk o r b us i ne s s o r f o r o t he r p u rp o se ) a n d

foreign p ersons who come to Ind ia or stay in Ind ia for emp loyment,

ca rr yi ng o ut bu si ne ss o r ot he r pur pos e. E ve n o ff ic e, br anc h o r

agency can b e 'p erson'.

0201

Residential Status:B . P er s on R e si d e nt ou t si d e I n di a ( P RO I ) [ s ec t io n 2 ( w) ] : Itm e a n s a p e r s o n w ho i s n o t r e s i d e n t i n I n d i a .

P e rs o n R e s i de n t o u t si d e i s s u b d iv i d e d i n t o f o l l ow i n g c a t e go r i e s:

( a ) N o n R es i d en t I n di a n ( N RI ) : i t m e an s a n i n di v id u al , w h o i se it he r c it iz en o f I nd ia o r P IO ( Pe rs on o f I nd ia n O r ig in ). P IOm e an s e i th e r h e o r e i th e r o f h i s p ar e nt s o r a n y of h i s g ra n d-

p a r e n t s w e r e b o r n i n u n d i v i d e d I n d i a . M a n yp r i v i l eg e s / b en e f i ts h a v e b e e n a c c o rd e d t o N R I s u n d erFEMA . The same are covered under di fferent topicshereunder.

( b ) N o n R e si d en t : I t m e an s a p e rs o n r e s id e nt o u ts i de I n di a , w h oi s n o t a n N R I .

T h e a bo v e c ou l d b e e as i ly u n de r st o od i n a d i a g ra m ma t icmanner highlighted below:

Person

R e si d in g i n I n di a >1 8 2 d a y s d u r i ng

p r e c ed i n g y e a r

C o m e s t o I n d i a / stay s i n I ndi a

Goes out of India / S t a ys o u t o f I n d i a

F orE mpl oy ment

F orE mpl oy ment

F or carry i ngB usi ness

F or carry i ngB usi ness

F o r a n

uncerta i n peri od

For a n

uncerta i n peri od

Resi denti n I ndi a

Resi dent i nI ndi a

Resi dent i nI ndi a

Person Resi dent

outsi de Indi a

Person Residen t

O u t s id e I n d i a

Person Resi dent

Outsi de Indi a

Person

A n y p e r s o n orB o d y c o r p o ra t e

r e g i st e r e d i n I n d i a

O f f i ce , B r a nc h , o r A g e n cy i nI n d i a o w n e d o r c o n t ro l l e d b y

a p e r s on r e s i d e nt o u t s i d e I n d i a

O f f i c e , B r a n c h , o r A g e n c y o u t s i d eI n d i a I n d i a o w n e d o r c o n t r o l l e d

b y a p e r s o n r e s i d e n t i n I n d i a

Resi deni n I ndi a



N ot es : Basic requirement for an individual t o be a resident of India is t hat he/she should have

st ayed in India for more t han 182 days during preceding year. If he/she did not , he never becomes

' p e r s on r e s i de n t o f I n di a ' f o r t h a t y e a r e . g . i f a p e r s o n s t a y e d i n I n d i a i n 2 0 0 8 - 0 9 f o r 1 8 2 d a y s o r l e s s ,

he can never be 'person resident in India' in 2004-05, irrespect ive of his st ay in India and

irrespect ive of his purpose t o go abroad or st ay in India.

A s a p p l i c at i o n o f D i r e ct Ta x l a w s h e a v i ly d e p e n d s u p o n r e s i de n t i als ta tu s o f a p er so n th e s am e i s a c ru ci al f ac to r t ha t d ec id es t heapplicat ion of FEMA provision & regulat ions.

A p er s on r es i d in g i n In d ia f o r m o re t h an 1 82 d a ys d ur i ng


5/160403

U n d e r F E M A t h e r e a r e m a i n l y t wo t y p e s o f t r a n s a c ti o n s :

A . C u r r en t Ac c o u nt Tr a n s ac t i o ns : I t m e a ns a t r a ns a c t io n o t h ert ha n a c ap it al a cc ou nt t ra ns ac ti on . I n in cl ud es t he

following:

( a) P ay me nt d ue i n c on ne ct io n w it h f or ei g n t ra de , o th erc ur re nt b us in es s , s er vi ce s a nd s h or t t er m b an ki ng a ndc r e d it f a c i l it i e s i n t h e o r d i na r y c o u r s e o f b u s i n es s

( b ) P ay m en t s d u e a s i n te r es t o n l o an s a n d a s n e t i n co m e f r ominvest ment s

( c) R em it ta nc es f or l iv in g e xp en se s of p ar en ts , s po us e a ndchildren residingabroad and

( d ) E x p e ns e s i n c o n n ec t i o n w i t h f o r e ig n t r a v el , e d u c at i o n a n dm e d i ca l c a r e o f p a r e nt s , s p o u s e & c hi l d r e n.

T h e d e fi n it i on i s ' i nc l us i v e' t h at m e an s b e s id e s a f or e sa i de x p e ns e s , a n y ex p e n di t u r e w h i c h i s n o t a c a p i ta l a c c ou n tt r a ns a c t io n w i l l a l s o b e a c u r r en t a c c ou n t t r a n sa c t i on e . g .p e rs o na l e x pe n se s of t r av e l, e d uc a ti o n & m ed i ca l c a re ,rent expenses et c

G en er al l y t he re a re n o r es tr ic ti on s on c ur re nt a cc ou ntt r an s ac t io n s u nl e ss t h e re b e in g a s p ec i fi c r e st r ic t io n b yC e n tr a l G o v e rn m e n t o r R B I .

T he re a re t ra ns ac ti on s (i ) f or w hi ch w it hd ra wa l o f f or ei gne xc ha ng e i s p r oh ib i te d. [ Sc he du le I ]; ( ii ) w hi ch r e q ui re p ri ora p p r ov a l o f c e n tr a l G o v e rn m e n t [ S c h e d u l e I I ] ; ( i i i ) w h i c h r e q u i rep r i o r a p p r o v a l o f R B I [ S c h e d u l e I I I ] .

Ty pe s o f Tr a ns ac t io n s : Illustrative transactions

Schedule I Prohibited Transactions:

R e m i t t an c e o u t o f l o t t er y w i n n i n g s

R em i tt a nc e o f i n co m e f r om r a ci n g/ r id i ng e t c. o r a n y o t he rhobby

R e m i t t a n c e f o r p u r c h a s e o f l o t t e r y t i c k e t s ,b a n n e d / p r e s c r i b e d m a g a z i n e s , f o o t b a l l p o o l s ,sweepst akes et c.

Schedule II G overnment approval:

Cult ural Tours

Re m i t ta n c e o f c o n t ai n e r d e t e nt i o n c h a r ge s ex c e e di n g t h er a t e p r e s c r i b e d b y D i r e ct o r G e n e r a l o f S h i p p in g

Schedule III RB I approval exceeding a specified

m o n e ta r y l i m i t :

G if t R em i tt a nc e e x ce e di n g U S $ 5 0 00 p e r r e mi t te r / d o no rp e r a n n um

D on a ti o n e x ce e di n g U S $ 1 0 ,0 0 0 p e r r e mi t te r / d o no r p e rannum

B . C a p i t al Ac c o u nt Tr a n s ac t i o ns :I t m e a n s ( i ) a t r a ns a c t io n w h i c h a l t e rs th e a s s e ts or l i a b i l it i e s ,

i n c l u di n g c o n t in g e n t l i a b i l it i e s o u t s id e I n d i a o f p e r s o n r e s i d en ti n I nd i a ( i i ) a t r a n sa c t i on w h ic h al t e r s t h e a s s e ts o r l i a b i li t i e s i nI n d i a o f p e r s on r e s i de n t o u t s id e I n d i a.

G e n e ra l l y c a p i ta l a c c o un t t r a ns a c t i on s a r e d e e m ed t o b eprohibit ed unless specifically permit t ed.


6/160605

Permissible C apital Account Transactions:

i . Transact ions specified i n Schedule I, of a personr e s i d en t i n I n d i a

i i. Tra ns ac ti ons s pec if ie d i n S ch ed ul e I I, of a p er so nr e s i d en t o u t s id e I n d i a

Illustrative transactions

Schedule I:

I nv es tm en t b y a p er so n r es i de nt i n I nd ia i n f or ei g nsecurit ies

Foreign currency loans raised in India & abroad by a personr e s i d en t i n I n d i a

Tr a ns f er o f i m mo v ab l e p r op e rt y ou t si d e I n di a b y a p e rs o nr e s i d en t i n I n d i a

Schedule II:

Is s u e o f a s e c u ri t y b y a b o d y c o r p or a t e o r a n e n t i ty i n I n d i aa n d i n v e s tm e n t t h e r e i n b y a p e r s on r e s i d e n t o u t s i d e I n d i a

A c q u i s i ti o n a n d t r a n sf e r o f i m m o va b l e p r o p er t y i n I n d i a b y ap e r s on r e s i de n t o u t s id e I n d i a

G ua ra nt ee b y a p er so n re si de nt i n In di a i n fa vo r o f, o r o nb e h al f o f , a p e r s on re s i d e nt o u t s id e I n d i a.

Prohibited C apital Account Transactions:

No p erson resid ent outsid e Ind ia shall make investment inInd ia, in any form, in any comp any, or p artnership firm or

p rop rietary concern or any entity, w hether incorp orated or

not, which is engaged or p rop oses to engage:i. In the b usiness of chit fund , or

ii. As Nid hi Comp any, or

iii. In agriculture or p lantation activities, or

iv. In real estate b usiness, or construction of farm houses,o r ( Fo r t he pu rp os e o f t hi s r eg ul at io n ' re al es ta te

b usi ness es' sha ll not incl ud e d eve lop m ent oft o wn s hi p s, c o ns t r uc t io n o f r e si d en t ia l / c o m m er c ia l

p remises, road s or b rid ges)

v. I n t r a d in g i n Tr a ns f er a bl e D e ve l op m en t R i g h t s ( T D Rs )

D e p o si t , a c a p i ta l a c c ou n t t r a ns a c t io n r ef e r r ed t o i n s e ct i o n 6 ( 3 ) (f )a n d s u bs e ct i on ( 2 ) o f s e c. 4 7 o f F E MA , i n cl u de s d e po s it o f m o ne yw i th a b a nk , c o mp a ny, p r op r ie t ar y c o nc e rn , p a rt n er s hi p f i rm ,

c o r p or a t e b o d y , t r u s t o r a n y ot h e r p e r s o n .A c c ep t a n ce o f d e p o si t s b y a n A u t ho r i z e d D e a l er B a n k f r o m P R O Iw o u l d b e a s u n d e r :

A . N o n- r es i d en t ( O r d i na r y) A c co u nt S c he m e ( N R O A c c o un t )

B . N o n- r es i d en t ( E x t er n al ) A c co u nt S c he m e ( N R E A c c o un t )

C . F or ei gn C u rr en cy ( N on -r es id en t) A cc ou nt B an ks S c he me(FCNR(B) A ccount )

D es cr ip ti on o f t he a bo ve a cc ou nt s i n a c om pa ra ti ve t ab le i shighlight ed below:

D eposits by Persons Resident Outside India [PROI]:

Des cr iptio nNo n-o r dinar y

R u p e e A c c ou n t( N R O A c c ou n t )

Non-Resi dent (External)

R u p e e A c c ou n t S c h e me

( N R E A c c o un t )

Fo r eign Cur r ency( No n-r es ident)

A c c ou n t ( B a n k)( F C N R( B ) A c c ou n t )

W h o c a n

o pen acco unt

P ers on R es id ent O uts id eI nd ia (I nd iv id uals / entities

of Bang lad es h/ P akis tan

nationality/ ow ners hipreq uires R BI ap p rov al)

NR I (I nd iv id uals / entitiesof Bang lad es h/ P akis tan

nationality/ ow ners hip

req uires R BI ap p rov al)

N R I ( I n d i v i d u a l s / e n t i t i e s

o f B a n g l a d e s h / P a k i s t a nn a t i o n a l i t y / o w n e r s h i p

r e q u i r e s R B I a p p r o v a l )

Repatr iable/No n-Repatr iable

N o n - re p a t r i ab l e ( E x ce p t

u n d e r U SD 1 m i l l i o n p e rFY s cheme)

R epa tria ble Rep atria ble

Ty p e o f A c co u nt

C u r r e nt , S a v i n gs ,R e c u r ri n g o r F i x e d

D ep os it Accounts

C u r r e nt , S a v i ng s ,R e c u rr i n g o r F i x e d

D ep os it Accounts

Term D ep os its

J o i n t A c c ou n t s J o i n t ly w i t h r e s i d e n ts Tw o o r m or e N R IS a m e a s NR E

account


7/16

07

I t i s t o n o t e h e r e t h a t f o r e i g n n a t i o n al s i . e . o t h e r t h a n N R I s c a n o p e n o n l y a n N R O a c c o un t for deposit wit h AD .

Ma jor

P ermissible

C redits

Ma jor

P ermissible

Debits

R e mi t ta n ce i n e r mi t te dforei g n currency

D e p o s i t b y a cc o u n thol d er d uri ng mp ora ryv is it to I nd ia

T r an s f e r f r o m r u p eea c c o u n t o f n o n -resi d ent b a nks etc.

R e m i t t a n c e i np e r m i t t e d f o r e i g ncurrency

P r o c e ed s o f f o r e i gnc u r r e n c y / b a n k n o t e st e n d e r e d d u r i n gt e mp o ra r y v i si t t o I n di a

T ra n s f er f r o m o t h e r N R Ea ccount,

T r a n s fe r f r o m N R O

a c c o u n t w i t h i n t h eo v e r al l li m i t o f U SD 1mi l l i on

S am e a s N RE

account

( e x ce p t f o r

t r a ns f e r f r o m

NRO ac c oun t )

L o c a l R u p e e p a y m e nt s R e mi t ta n ce o u ts i de I n di a

o f c u r r e n ti n co m e i n I n di a ( n et o fta xes)

t r a n s f e r t o N R Ea c c o u n t s u b j e c t t oo v er a ll c e il i ng o f U SD 1mi l l i on

L o c a l d i s b u rs e m e nt s r e m i t t a n c e o u t s i d e

I nd ia t r a n s f e r t o o t h e r

NR E /FC NR account etc

S a me a s

NRE ac c ou nt

T r an s f e r o f F u n d s

b e t w ee n d i f f er e n ta ccounts

To N R E A c co u nt

permissible

( w it h in U S D 1 m i ll i o n)

To N R O a c co u nt

n ot permi ssibl e

Not appl i c abl e

L o an - t oa ccount

holders

R u p ee l o a n a g a in s ts e cu r i ty o f f i x ed d e p os i t s

f o r p e r so n al p u rp o s e o rb u s in e ss p u rp o s e e x ce p t

f o r r e l en d i ng o ragri c u lt u ral / pl an t ati on

a c ti v i ty o r f o r i n ve s t me n ti n r e al e s ta te

business

F o r p e r so n al p u rp o s e o rb u s in e ss p u rp o s e e x c ep t

f o r r e l en d in g o ragri c u lt u ral / pl an t at ion

a c ti v i ty o r f o r i n v es t me n ti n r e a l e s t at e b u s in e s s

F o r d i r ec t i n v es t me n t i nIn di a i n fi rms/c ompan i es

on n on -repat ri at i onb u s in e ss F o r p u rp o s e o f

f la t i n I nd ia f or o wn

resi den ti al pu rpose

S am e a sN R E a c co u nt

L oa n t o t h ir d

pa rties

L o a ns / o ve r d ra f t s t o R / fi rms/ In di an / c ompani es

a g ai ns t s e cu ri ty o f F D i nN R O a c co u nt s u b je c t t o

conditions

F u nd b a s ed / n o n- f u ndb a s ed t o R e s id e nt /

f i r ms / I n d ia n / c o mp a ni e sa ga i ns t s e cu ri ty o f F D i n

N R E a c co u nt s u bj e c t t oconditions

L o a n - o u t s i d eIndia

Not a llowed Fund based o r n on-fundb as ed t o o r i n f av or o f

N RI o r t o t hi rd p ar t ie s

Income ta xe x e m pt i o n o n

interest

Taxabl e Not taxabl e Not taxable

S am e a s N REaccount

S am e a s N REaccount

Declarat ion should besupport ed by evidence.

S ho w i n g f u l l e x p o rt v a l u e

E x po r te r t o t a ke n e ce s sa r y s te p s t o e n su r e r e al i z at i on o f e x po r tproceeds

E xp or t t ra de i s re gu la te d by t he D ir ec to ra te G en er al o f F or ei g nTrade(DGFT).

A . D e c l a ra t i o n a s r e g a r ds e x p o rt o f g o o d s a n d s e r v ic e s

Ex p or t er t o f u rn i sh a d e cl a ra t io n t o R B I o r o t he rprescribed aut horit y

S h ow i ng F ul l E x po r t V al u e

F ul l v al ue o f e xp or t t o b e t he a mo un t t ha t e xp or te re x pe c ts to r e ce i ve i n c a se f u ll e x po r t v a lu e i s n o ta s ce r ta i na b le a t t h e t i me o f e x po r t.

E x p o rt e r t o t a k e n e c es s a r y s t e p s t o e n s u re r e a l iz a t i on o f

e x p o rt p r o c ee d si . F o r m & m a n n er o f e x p o rt d e c l a ra t i o n

D e c l ar a t i on s h o u l d b e s u b m i tt e d i n s e t s o f n u m b er s a sspecified. Prescribed declarat ion forms by FEMAr e g u l at i o n s a r e a s u n d e r :

E xp or t o f G oo ds & S er vi ce s :

C o p i es t o b es ubmitted

1 G R F or e xp or ts o th er wi se t ha n b y p o st i nc lu di ngex p ort of s oftw are in p hys ical form

D up licate

S D F2

3

F o r e x p o r ts d e c l a r e d t o C u s t om s o f f i c esn o t i f i ed b y t h e C e n t r al G o ve r n m e nt w h ic h

h a v e i n t r o du c e d E l e c t ro n i c D a t a I n t e r ch a n g e( E D I) s y s t e m f o r p r o c e ss i n g s h i p pi n g b i l l s

D u p l ic a t e & a p p e n d e dt o s h ip p in g b i ll

P P F or E xpo rt by pos t D up licate

S OFTE X Fo r ex port o f softwa re other wis ehan in p hys ical form

Trip licate4

P ur p os e o f F o rmFo r mS r. N o .

08


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1009

Par ticular s Des cr iptio n

i i . E x em p ti o n f r o m d e cl a ra t io n :

E xp or t o f g oo ds o r s er vi ce m ay b e m ad e w it ho ut f ur ni sh in g t hedeclarat ion in t he following cases:

T ra d e S a m p le s T r ad e s a m p le s o f g o o d s a n d p u b l ic i t y

m a t e r i al s u p p li e d f r e e o f p a y m en tBaggage P ers onal effects of trav elers , w hether

accomp anied or un-accomp anied

Sto r es /Trans hipment Car go S hip 's s tores & trans hip ment carg o

G o o d s s u pp l i e d u n d e r t h e o r d e r s o f C e n tr a lG o v e r nm e n t a l s o g o o d s s u p pl i e d f o r m i l i t a r y,n a v a l o r a i r f o r c e r e q u i re m e n t s

G o o d s o r s o f t wa r e a c c o m pa n i e d b y ad e c l a ra t i o n b y t h e e x p o rt e r t ha t t he y a r e

n o t m o r e t h a n U S $ 2 5 0 00 i n v a l u e

G i f t o f g o o d s a c c o m pa n i e d b y a d e c l ar a t i o n

b y t h e e x po r te r t ha t t he y a r e n o t mo r e t h anf i v e l a k h r u p e es i n v a l u e .

A i r c r a ft s o r a i r c r a f t e n gi n e s a n d s p a r e p a r t sf o r o v e r h a u l in g a n d / o r r e p a i rs a b r o a d s u b je c tt o t h e i r r e -i m p o r t i n t o I n d i a a f t e r o ve r h a u l in g

/rep airs , w ithin a p eriod of s ix months fromt h e d a t e o f th e i r e x p o rt .

Goods i mported free of cost on re-export ba si s

G o o d s n o t e x c e e d i n g U S $ 1 0 0 0 o r i t sequi va l ent i n va l ue per tra nsa cti on exported toMya nma r under Ba rter Tra de Agreement

between the C entra l Government a nd theG o v e r n m e n t o f M y a n m a r

R epl a cement goods exported free of cha rge i na ccorda nce wi th the provi si ons of EXIM Pol i cyi n f o r c e

G o od s s en t o u ts i de I n di a f o r t e s ti n g a n d r e - i m po r t

D e fe c ti v e g o o d s s e n t o u ts i de I n di a f o r r e p a ira n d r e - i m p or t

E x po r ts p e rm i tt e d b y R B I a s p e r c o n d it i on s

s t i p ul a t e d i n t h e p e r m is s i o n.

G o ver nment/ M inis tr y s upplies

G o o d s of v a l u e l e s s t h an U S D 2 5 ,0 0 0

G i f t s l e s s th a n R s. F i v e L a k h s

Air cr afts fo r o ver hauling

Impo r ts o n r e-ex po rt bas is

S m al l v a lu e g o od s t o M y an m ar

R e pl a c em e n t g o o ds e x p or t e d f r e e o f c h a rg e

G o od s s e nt f o r t e st i ng a n d r e - i mp o rt

D e f ec t i ve g o o ds s e n t a b ro a d f o r r e p ai r

a n d r e - i mp o r t

E x po r ts w i th p er m is s io n o f R B I

B . C e rt a in E x po r t r e qu i re s p r io r a p p ro v al :

F o l l o wi n g e x p o rt s n e e d p r i or a p p r ov a l o f R B I :

i. Lease/Hire: E x po r t o f g o od s o n l ea s e, h i re o r a n y m an n er o t he rt h a n s a le o r d i s p o sa l a s s u c h r e q ui r e s R B I a p p r o v a l .

ii. Export on elongated credit terms: Export s on elongat ed creditt e r m r e q u i r e s R B I a p p r ov a l .

iii. Counter Trade: C o un t er Tr a de i . e. a n y a r ra n ge m en t i n vo l vi n ga d ju s tm e nt o f v a lu e o f g o od s i mp o rt e d i n to I n di a a g ai n st v a lu eo f g oo ds e x p or te d f ro m I nd ia r eq ui re s R B I a pp ro va l. [ No te : -C o u n te r Tr a d e P r o po s a l f o r t r a n s ac t i o n t a k i ng p l a ce b e t we e n

t h e I n d ia n P ar t y & t h e o v e r se a s p a r t y t h r o ug h E s c r ow A c c o un t

o p e ne d i n I n d ia i n U S D o l l ar w i l l b e c o n s id e r e d b y R B I s u b je c t t o

certain cond itions.]

C . R e ce i pt of E x po r t P r oc e e ds

E x p o rt p r o c ee d s t o b e r e a l i se d w i t h in t h e p e r i o d s p e c if i e d .G e n e ra l l y w i th i n o n e y e a r f r o m t h e d a y o f e x p o r t .

R e- im po rt w it hi n t he p er io d o f r ea li za ti on o f e xp or tproceeds is considered to be realizat ion.

R ec e ip t o f p a ym e nt - b y b an k d ra f ts , b a nk er ' s ch e qu e s,f or ei gn c ur re nc y, p ay me nt f ro m F CN R/ NR E a cc ou nt o fb u y e r o r I n t er n a t io n a l C r e d i t C a r d s.

D . A d v a n ce P ay m e n t r e c e i ve d b y e x p o rt e r f ro m f or e i g n b u y e r :

W h e r e a n e xp o r t er r e c e i ve s a dv a n c e p a y m en t ( w i t h o r w i t h ou ti n te r es t ), f r om a b u ye r o u ts i d e I n d i a, t h e e x p o rt e r s h a l l b e u n de ro b l i g at i o n t o e n s u re t h a t:


9/16

( i) T he s hi pm en t o f g oo ds i s m ad e w it hi n on e y ea r f ro m t hed a t e o f r e c e ip t o f a d v a nc e p a y m en t ;

(ii) The rate of i nt erest, if any, payable on the advancepayment does not exceed London Int er-Bank Offered Rat e

( L I B OR ) + 1 0 0 b a s i s p o i n t s , a n d

( i i i ) T h e d o c u me n t s c o v e ri n g t h e s h i p m en t a r e r o u te d t h r ou g ht he a ut ho ri ze d d ea le r t hr ou gh w ho m t he a dv an ce i sreceived.

R e m i tt a n ce t o w ar d s r e f u nd o f a d va n c e p a y m en t i n c a s e of

failure to ship the good s should w ithin one year, should b e

mad e with p rior ap p roval of RB I.

A -P r i o r a p p ro v a l o f R BI r e q u ir e d i n c a s e s h i p me n t o f go o d s

is to b e mad e b eyond the p eriod of one year from the d ate of

receip t of ad vance p ayment.

A p e r s on r e s id e nt i n I n di a t o r e al i z e a n d r ep a tr i at e t o I n di as u c h fo r e i g n e x c h an g e w h i c h ha s a c cr u e d to h i m o r i s d u et o h i m .

To t a ke n e ce s sa r y s t ep s to r e al i ze t h e f o re i gn e xc h an g edue.

R e pa t ri a te t o I n di a ' m e an s b r in g in g i n to I n di a t h e r e al i z edf o r e ig n ex c h an g e a n d ( i ) s e l l i ng o f s u c h f o r ei g n ex c h a ng et o a n a ut h o r is e d p e rs o n i n I n d i a i n e x ch a n g e f o r r u p e es o r( i i) t h e h o ld i ng o f r e al i se d a m ou n t i n a n a c co u nt w i th a na u th o ri z ed p e r so n i n I n di a t o t h e e x te n t n o ti f ie d b y R B I . I t

a l so i n cl u de s u s e o f r e al i ze d a m o un t f o r d i s c ha r ge o f a d e btor liabilit y denominat ed in foreign exchange.

Realization & Repatriation of Foreign Exchange:

1211


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1413

I m p o rt t r a d e i s r e g u la t e d b y t h e D i r e ct o r at e G e n er a l o f F o r e i gn T r ad e(DGFT).

A n a p p l i ca t io n i n f o r m A - 1 t o b e m a de f o r i m p o r t e x c e ed i ngUSD 5000

B an k s ca n fr e el y o pe n l et te r s of c r ed i t a n d a l l owr e m i tt a n c es e x c e pt f o r g o o d s r e q u i r i ng s p e c i al l i c e n se s .

G en e r a ll y t he t i m e l i m i t f o r i m p o r t r e m i t t a nc e s i s s i x m o n thfrom the date of s hipment of goods. Permi ssion forr e m i tt a n c es e x c ee d i n g t h e a b o v e t i m e l i m i t d e p e nd s u p o nfact s & circumst ances.

For Deferred payment arrangements f o r r e mi t ta n ce sexceeding six months from t he date of s hipmentprocedural guid elines of E xternal Commercial B orrowings& T ra d e C r e d it s i s t o b e f o l l o we d .

No li mi t on import of foreig n exchange. However,e xc ee di ng a s pe ci fi ed s um a d ec la ra ti on f or m h as t o b efiled.

A dv an ce r em it ta nc e f or i mp or t o f g oo ds i s a ll ow ab le

s u b j ec t t o c e r t ai n c o n d it i o n s. B P O c o m p an i e s al l o w e d ma k i n g r e m i tt a n ce s t o w ar d s t h e

c o s t o f e q u i p me n t t o b e i m p o r te d a t t h e i r o v e r s e a s s i t e .

I mp or t o f G oo ds & S er vi ce s

A s c he m at i c r e pr e se n ta t io n f o r f o re i g n i n ve s tm e nt i n I n di a i shighlight ed below:

F o re i gn I n ve s tm en t i n I n di a

Fo r eignInves tments

Inv es t ment s on non- repa t ria ble ba s is

O th er In vestmen ts( G - s e c , N C D s , e t c . )

F orei gnVen tu re Capi tal

I n vestm en ts

F orei gn Portfol i oI n vestm en ts

Foreign DirecI n ves t men t s

AutomaticRoute

Govt.Route

FIIs FIIsNRIs,

P I O , Q F I sNRIs,

P I O , Q F I sNRIs,

PIOS E B I r e g d .

FVCIs

Pe rsons Re sidento utside India

Pe rsons Re sidento utside India

VCF,IVCUs

A s i t i s c l ea r ly a h i gh l ig h te d a b ov e b r oa d ly , f o re i gn i n v es t me n t i nI n d i a c a n b e u n d e r t h e f o l l ow i n g h e a d s:

A . F o re i gn D i re c t I n v es t me n t i n I n di a [ F DI ]

B . F o re i gn P o rt f ol i o I n v e st m en t

C . F o re i gn Ve n tu r e C a p it a l I n v es t me n ts

D. O th er I nv es tm en ts

E . I n ve s tm e nt s o n n o n -r e pa t ri a bl e b a si s

Let us t ry and underst and each of t hem separat ely:


11/16

1615

A . F o re i g n D i r ec t I nv e st m en t in I n di a

G o v e rn m e n t o f I n d i a a l o n g w i t h M i n i s tr y of C o m me r c e & I nd u s t ry &D e p ar t m e nt o f I n d u st r i a l P o l ic y & P r o m o t io n i s s u e s a ' C o n so l i d a te dF D I P o l ic y C i r cu l a r ' o n a y e a r l y ba s i s o n M ar c h 3 1 o f e a c h y ea r w h i c hp r es c ri b e a m on g st o t he r t h in g s t h e m o d e o f i n ve s tm e nt i . e. i s su e o ra c qu i si t io n o f s h ar e s/ c on v er t ib l e d e be n tu r es a n d p r ef e re n ce

s h a r es , m a n n er o f r e c e ip t o f f u n d s, p r i c i ng g u i d e li n e s , a n d r e p o rt i n go f i n v e st m e n ts t o t h e R e s er v e B a n k .

U nd er t he F DI s ch em e, i nv es tm en ts c an b e m ad e i n s ha re s,mandat orily & fully convert ible debent ures and mandat orily & fullyc o nv e rt i bl e p r ef e re n ce s h ar e s o f a n In d ia n co m pa n y b y no n -resident s t hrough t wo rout es:

i . A ut om at ic Ro ut e: U nd er th e a ut om ati c r ou te , t he fo re ig ni n ve s to r o r t h e I n di a n c om p an y d o es n o t r e qu i re a n y a pp r ov a l

f r o m t h e R e s er v e B a n k o r G o v e rn m e nt o f I n d i a f o r i n v e s tm e n t .i i . G o v e rn m e nt R o u te / A p p ro v a l R o u te : U n de r t h e G o ve r nm e nt

R o u te , t h e f o r e ig n i n v e s to r o r t h e I n d i an C o m p an y s h o ul d o b t a i np r io r a p pr o va l o f t h e G o ve r nm e nt o f I n di a , M i ni s tr y o f F i na n ce ,Foreign Invest ment Promot ion Board (FIPB) for t he invest ment .

T he d et ai ls o f th e e ntr y ro ute ap pl ic ab le a nd t he m ax im ump e r m i s s i b l e f o r e i g n i n v e s t m e n t / s e c t o r a l c a p i n t e r m s o fp e rc e nt a ge i n a n I n di a n C o mp a ny ar e d e te r mi n ed b y t h e s e c to r i nwhich it is operat ing.

Des cr iptio n

1 E l i g ib l e I n v e s to r s fo r F D I A n y P R O I# * , o r a n e n t i t y i n c o r po r a t e d o u t s i de I n d i a ,

Par ticular sS r. N o .

2 Types o f Ins tr uments E q u i ty s h a r e s, F u l l y & m a n d a to r i l y c o n v er t i b l ed e b e nt u r e s a nd f u l l y & m a n d a to r i l y c o n v er t i b l eP r e f er e n c e s h a r e s

3 Pr icing Fres h I s s ue- F o r l i s t e d c o m p a ni e s : o n t h e b a s i s o f S EB I

g uid elines- F o r u n l i s t e d c o m p an i e s : f a i r v a l u e a s d e t e r m i ne d

b y a C A / SE B I r e g i st e r e d m e r c h an t b a n k er a p p l y i n gD i s c ou n t e d C a s h F l o w M e t h o d ( D C F ).

Des cr iptio nPar ticular sS r. N o .

Acq uis ition/trans fer of ex is ting s hares :

- F o r l i s t e d c o m p an i e s :N e go t ia t e d p r i c e s h ou l d n o t b e l e ss t h a n p r i ce a s

p er S E BI g uid elines- F o r u n l i s te d c o m p a ni e s :

N e g o ti a t e d p r i c e s h o u l d n o t be l e s s t h a n f a i r va l u e

a s d e te r m in e d b y a C A o r S E BI r e g i st e r edM e r c h a nt B a n k e r a p p ly i n g D C F m e t h o d

4 M od e o f P ay m en t I n w a r d r e m i t t an c e t h r o u gh n o r m a l b a n k i n gchannels .

D e b it t o N R E /F C N R a c c o u nt o f a p e r s o n co n c e r ne di . e. N R I

C onv ers ion of royalty/lump s um/ technicalk n o w ho w f e e d u e f o r p a y m e nt o r c o n v e r s i on o fE C B

C onv ers ion of imp ort p ayab les /p re incorp orationex p ens es

5 P r io r P e rm i s s i on o f R B I Tr a ns f er o f s ha r e b y w a y o f g if t b y a r e si d en t t o aPROI

D eferment of receip t of cons id eration on trans fer ofs h ar e t o n o n r e s id e nt

6 Repo r ting ( Co mpliance) O n I s s ue o f s h a r e s :- I n t im a ti o n t o R B I vi a A D B a nk i n a s p ec i fi e d f o rm

w ithin 30 d ays of receip t of cons id eration- F i l i n g o f f o r m F C- G P R w i t h A D B a n k w i th i n 3 0 d a ys

o f f r o m i s s ue o f s h a r e s O n Trans fer of s hares :

- F i l i n g o f f o r m F C -T R S w i t hi n 6 0 d a y s f r o m d a t e o f

receip t of cons id eration

# O t he r t h an a c i ti z en of P ak i s ta n & an en t it y i n co r po r at e d i nPakist an

* A c i t iz e n o f B a ng l ad e sh o r a n e nt i ty i n c or p or a te d i n B a ng l ad e shc a n i n v e s t i n In d i a u n d er F D I w i t h p r i o r a p p r o v a l o f t h e F I P B .

^ Is su e o f o th er t yp e o f p re fe re nc e s ha re s s uc h a s o pt io na ll yc on ve rt ib le , p ar ti al ly c on ve rt ib le w ou ld h av e t o b e d on e i na cc or da nc e w i th E xt er na l C om me rc ia l B or ro wi ng s ( EC B)

guidelines.


12/16

1817

T he s am e p ri ci ng g ui de li ne s a re a ls o a pp li ca bl e f or i s su es o fs h ar e s ag a in s t p a ym e nt o f l u mp s u m t e ch n ic a l k n ow - ho w f e e / r o y al t y o r c o n v er s i o n o f E C B i n t o e q u i ty or c a p i ta l i z a ti o n o f p r eincorporat ion expenses/import payables.

S h a r es s ho u l d b e i s s u e d w i t h i n 1 8 0 d a y s f r o m t h e d a t e r e c e ip tof consideration.

C o m p li a n c e C h a r t

R e c ei p t o f f u n d s f o rFo r eign Inves tment

I n t i m at i o n t o R B I w i t h i n3 0 d a ys o f R ec e ip t

I s su e o f s h ar e s w i th i n 1 8 0 d a ys

f ro m t h e d a t e o f R ec ei pt o f F un ds

F i li n g o f F or m F C - GP R w it hi n 3 0 d ay s

f r om t he d at e o f i s su an ce o f s ha re s

F i l i n g a n A n n u al R e t ur n w i t h RB If o r p o s i ti o n o f f o r ei g n i n v e s t me n t

B . Foreign Portfolio Investment

Des cr iptio n

1 W h o c a n in v e s t


2 C e i l in g o n i n v e s t m en t

Foreig n I ns titutional I nv es tors (FI I s ) reg is tered w ithS E BI

NR I s S E B I a p pr o v e d s u b a c c o u nt o f F I I Q u a l i fi e d F o r e i g n In v e s to r i n l i s t e d e q u i t y s h a r e s#

An ind iv id ual FI I /S E BI ap p rov ed s ub account =max imum of 10 p ercent of p aid -up cap ital

T o t al h o l d i n g o f a l l F I I s / S E BI a p p r o v ed s u b a c c o un t sof FI I s hall not ex ceed 24 p ercent

N R I c an i n v e st u n d e r PI S r o u t e u p t o 5 p e r c en t o ft he p ai d u p c ap it al

C eiling on Total hold ing of all NR I s is 10 p ercent

F o r Q F I s t h e s a m e l i m i t w o u l d a p p l y a s a p p l i ca b l e t oNR I s

Des cr iptio n

3 T ra d i n g i n e x c h an g etr aded der ivatives


F I I s a r e a l l o w e d t o t r a d e i n a l l a p p r ov e d e x c h a ng e

t r a d e d d e r i va t i v e s o n a r e p a t r ia b l e b a s i s. N R I s a r e a l l o w ed t o t r a d e i n a l l a p p r ov e d e x c h a ng e

t r a d e d d e r i va t i v e s bu t o n a n o n r e p a tr i a b l e b a s i s. Q FI s not allow ed .

For FI I s allow ed

For NR I s not allow ed

4 S h o r t S e l l i ng

5 T ra n s f er o f S h a r es S hares acq uired und er P I S cannot bet r a n s fe r r e d un d e r a p r i v a te p l a c e me n t u n l e s sa p pr o ve d b y R B I.

# Q F I s w o u l d m e a n n o n r es i d e n t i n v es t o r s , o t h e r t h a n S E B I r e g is t e r e dFIIs & FVCIs.

C . Foreign Venture C apital Investments

Des cr iptio n

1 W h o C a n In v e s t


A S E B I r e g is t e r e d F o r e i gn V e n t u re C a p i t al I n v e s t or(FVC I ) w ith s pecific ap p rov al from R BI

I n I nd ian Venture C ap ital Und ertaking (I VC U) or V e nt u r e C a p i ta l F u n d ( V C F ) o r I n a s c he m e f l oa t ed b y s u ch V CF s I n v e s t me n t i n s e c u r i t i es o n a r e c o g ni z e d s t o c k

e x c h a ng e s u b je c t t o p r o v is i o n s o f S E B I ( F V C I )reg ulations

E q u i ty / E qu i t y l i n k ed i n s t r um e n t s

D eb t/D eb t ins truments D eb entures U n i ts o f s ch e m e s /f u n d s s e t u p b y a V C F

Throug h I P O s P r i v a t e P l a c e me n t P ur c h a se f r o m th i r d p a r t y P r i v a t e a r r a n g em e n t

2 W h er e t o i n ve s t

3 Ty p e o f I n s t r um e n t

4 M o de o f I n ve s tm e nt


13/16

2019

A b o dy c o rp o ra t e i n co r po r at e d o u ts i d e I n di a ( i nc l ud i ng a f i rm o ro t h er a s s o ci a t i on o f i n d i v id u a l s ) c a n es t a b l is h a p l a c e o f b u s i ne s s i nI nd ia b y s et ti ng u p a B ra nc h of fi ce ( BO ) o r L i ai s on O ff ic e ( LO ) o r a

p ro je ct o ff ic e ( PO ). A c om pa ra ti ve t ab l e d es cr ib in g a ll t he t hr eeopt ions:

E st a bl i sh m en t o f a p l ac e o f b u si n es s i n I n di a :

P r oj e c t O f f i ce ( P O )

1 W h o c a n op e n

Par ticular sS r. N o . B r an c h O f fi c e ( B O) L i ai s on Of f ic e ( LO )

A b o d y c o r p o r a t eincorp orated outs id eI n d i a ( i n c l u d i n g af i r m o r o t h e ra s s o c i a t i o n o fI nd iv id uals )

S ame as BO / Foreig n C omp anies

2

3

Per mis s io n fo rs e tt i ng u p

E ligibility Cr iter ia

P rior ap p rov al ofR BI

Foreig n Banks d onot req uires e p a ra t e a p p r ov a lu n d e r F E M A f o ro p e n i ng B r a n c ho f f i c e. H o w e ve rap p rov al fromD ep artment of

BankingO p erations &D ev elop ment,

R BI .

P rior ap p rov al ofR BI

Foreig n I ns uranceC omp aniesw o u l d r e q u i reap p rov al fromI ns uranceR e g u la t o r y &D ev elop mentA u t h or i t y o f I n d i a

(IRDA) Foreig n Banks

w o u l d r e q u i re

ap p rov al fromD ep artment ofBankingO p erations &D ev elop ment( D B O D) , R B I .

N o P r i o r a pp r o v a lfrom R BI s ub j ect

t o c e rt a i ncond itionsex cep t intimationt o R B I w it h i n 2months .H o w e ve r , f o r e i gnnon-g ov ernmentorg anis ations /no

n-p rofitorg anis ations /foreig n g ov ernment

b od ies /d ep artmen t s w o u ld r e q u i r ep rior p ermis s ionof R BI .

P rofit makingtrack record

d u r i n g p r e c e di n gf i v e f i n a n ci a lyears in homecountry

P rofit makingtrack record

d u r i ng p r e c e di n gt h r e e f i n a n ci a lyears in homecountry

General p ermis s ion

of R BI is av ailab let o f o re i gncomp anies if theys a t i sf y f o l l o w in g s :

D. Other Foreign Investments:

Des cr iptio n

1 I n v e s t me n t b y N R I s


Investment i n sha res/converti b l ed eb entures, Governments e c u r it i e s , t r e a su r y b i l ls , u n i t s o f d o m e s ti c m u t u al f u n d s ,uni ts of money ma rket mutua l fund s.

W i thout l i mi t on non-rep atri a b l eb a si s S al e p r oc e e ds t o b e c r ed i te d t o N R O ac c ou n t if o n n on -

rep a tri a b l eb a si s

Can alsoinvest in non- c onvertibledebentures both on non- repatriable basis as well as repatriable basis subjec t to

c ertain c onditions N RIs not allowedinvesting in Public Provident F und (PPF ).

C an b e i s su e d b y no n- r e sid e nt c o mp a nie s i n Ind i a S E B I r e g is t e r e d F I I s a n d S u b - ac c o u n ts & N R I s m a y

i n v e st , p u r c ha s e , h o l d , t r a ns f e r I D R s o f e l i gi b l ecomp a ni es resi dent outsi d e Ind i a

N o t r e d e em a b le i n t o u n d e r ly i n g e q u i ty s h a r es b e f o re t h ee x p i ry o f on e y e a r p e r i od f r o m t h e d a t e o f is s u e

C omp l i a nce wi th F orei g n Excha ng e Ma na g ement (Issueor Tra nsfer of F orei g n S ecuri ty ) R eg ul a tions a t the ti meof red emp ti on

P r o ce e d s o n th e i s s u e o f ID R s t o b e r e p a tr i a t ed o u t s id eInd i a i mmed i a tel y

P e r mi t t e d t o i n v e st o n r e p a tr i a bl e b a s is i n r u p e ed enomi na ted uni ts of equi ty schemes of S EBI reg i steredd o m e st i c M F s

I n ve s tm e nt c a n be m a de b y t w o r o u t e s- D i r e c t R o u t e i . e . S E B I r e g is t e r e d D e p o s i t a ry

P a rti ci p a nt route- Ind i rect R oute i .e. Uni t C onfi rma ti on R ecei p t (UC R )

R oute P ermi tted to i nvest i n d eb t securi ti es on rep a tri a ti on

b a si s sub ject to certa i n cond i ti ons

I n v e st m e n t i n G o v e r n m en t s e c u r i t ie s , t r e a su r y b i l ls , u n i t so f d o m e s t ic m u t u al f u n d s , u n i t s o f m o n e y m a r ke t m u t u a lfund s.

M a x im u m inve s tme nt b y S E B I r e gi s t e re d F I I s i nGove r nme nt Se c ur itie s a t p resent i s U SD 25 b illion

2 I n v e s t me n t i n I D R s

3 I n v e s t me n t b y F I I s i n

o t h e r s e c u ri t i e s

4 I n v e s t me n t b y Q F I s i nu n i t s o f D o m es t i c M u t u alF u n d & d e b t s e c u ri t i e s

5 I n v e s t me n t i n

I n f r as t r u c tu r e D e b tFunds ( IDF)

F I I s , N R I s , H N I s, V a r io u s G l o b al F u n d s e t c a r e e l i g ib l et o i n ve s t

El i g i b l e Instruments F orei g n C urrency & R up eed e n o mi n a te d b o n d s & R u p e e d e n o mi n a t ed b o n d s

Overa l l Ma xi mum forei g n i nvestment l i mi t U SD 25billion ( U S D 1 2 bi l l io n by F I I s, U S D 3 b il l i o n b y Q F I s &U S D 1 0 b i l l i on b y N R I s , o t h e r v a r io u s g l o b al f u n d s )


14/16

2221

P r oj e c t O f f i ce ( P O )

7 O p e ra t i n g t i m elimit

Par ticular sS r. N o . B r an c h O f fi c e ( B O) L i ai s on Of f ic e ( LO )

D o e s n o t ha v e a n yt i m e l i m i t f o r

c a r r y i n g o nb us ines s

P O h a s ti m e l i m i t a sp er C ontractAg reement

R e ga r de d a s a P E i nI n di a o f t h e f o r ei g ncomp any

8 PermanentE s tablis hment

L O s ha l l b e o p e n e df o r a p e r i o d o f t h r e e

y ea r s an d f ur t he rr e n e w a l c a n b eo b t a i n e d t h r o u g hAD

N o t re g ar d ed a s aP E in I n di a s u b je c tt o D T A A a n dD o m e st i c T ax / l a wss u bj e ct t o l i a is o n

activ ities only

C a n a c q u i r ei m m o v a b l ep r o p e r t y o n l y o n

l ea se t ha t t o n ote x c e e d i n g f i v eyears

R e q u i r e d t o f i l ereturn of income.N o t l i a b l e f o ri n co m e t a x as n oi n c o m e o r r e v e nu e

earned

R e q u i r e d t o f i l er e t u r n o f i n co m e i nr e s p e c t o f P Oop erations .

C a n i n v e s t i ni m m o v a b l ep r o p e r t y w i t h o u t

p r i o r a p p r o v a ls u bj e ct to c e rt a i ncond itions

R e ga r de d a s a P E i nI n di a o f t h e f o r ei g ncomp any

R e qu i re d t o f i l e

r e t u r n of I n c o m e i nres p ect of BOop erations

C an acq uirei m m o va b l e p r o p e rt yon ow ners hip /leas e

9 Co mpliance

r equir ements underI n co m e Ta x A c t

10 Acquis itio n o fImmo vableProperty

11 Co mpliances Annual Activ ityC e r t i fi c a t e ( A A C)f r o m C A a l o n gw i t h t he a u d i te d

b a l a n ce s h e e t tob e s u bm i tt e d t oA D b a n k wi t h ac o py t o D i re c to r

General of I ncomeTax (I nternationalTa x a t i o n) , N e wD elhi on orb e f o r e 3 0 t hS ep temb er ev eryyear

S u b mi t a r e p o r t

Annual Activ ityC e r t i fi c a t e ( A A C)f r o m C A a l o n gw i t h t he a u d i te d

b a l a n ce s h e e t tob e s u bm i tt e d t oA D b a n k wi t h ac o py t o D i re c to r

General ofI n c o me T ax(I nternationalTa x a t i o n) , N e wD elhi on orb e f o r e 3 0 t hS ep temb er ev ery

Annual certificatef r om a C As h o w in g t h ep roj ect s tatus and

t h a t t h e a c c o u nt so f t h e P O h asb e e n a u di t e d a n da c t i v it i e s a r e a s

p er ap p rov al b yR BI .

S u b mi t a r e p o r tas p er p res crib edformat on anannual b as is w itht h e D i r e c to r

P r oj e c t O f f i ce ( P O )Par ticular sS r. N o . B r an c h O f fi c e ( B O) L i ai s on Of f ic e ( LO )

Not les s thanU S D 1 0 0 , 0 00 o f

Net w orth as p ert h e l a t e s t A ud i t e d

Not les s thanU S D 5 0 , 0 0 0 o f

Net w orth as p ert h e l a t es tA u d i t ed B a l a n c eS h e e t c e rt i f i e d b y

a C PA

F C h a s s ec u r e d acontract from an

I n d i an C o m p a n y t oe x ec u te a p r oj e ct i nI n di a a n di . T h e p r oj e ct i s

f u nd e d b y i n wa r dr e m i t t an c e o ri i . t h e p r oj e ct i s

f un de d b y ab ilateral or

multilateralI nternationalF i n a n c in g A g e n cy

ori i i . t he p r o j e ct h a s

b e e n cl e a r e d b yan ap p rop riate

a u t h o ri t y o ri v. a c om pa n y o r

e n t i t y i n I n di aa w a r d in g t h econtract hasb een g rantedt e r m lo a n b y aP u b li c F i n a n ci a lI ns titution (P FI )

4 Applicatio n Fo r m Form F NC F orm FNC N o p r e s cr i b e d

form as s uch

5 Per mitted activities E ig ht activ itiesp e rm i t te d b y R B I f o rB O . L o c a lm a n u fa c t u r i ng &r e ta i l t r a d in g a r e n o tp ermitted

Local ex p ens es canb e m e t t hr o u g hi n w a r d r e m i t t an c e sor local earning s

Local ex p ens es canb e m e t o n ly o u t o fi n w a r d r e m i t ta n c e s

Local ex p ens es canb e m e t t hr o u g hi n w a r d r e m i t ta n c e sor local earning s

O n l y i n f o r ma t i o nc o l l e c ti o n , m a r k ets urv ey,communicationa c t i v it y e t cp ermitted

P O c a n o n l y e x e c ut ep roj ects

6 F u nd i ng f o r l o ca lo per atio ns


15/16

2423

A c qu i si t i on & Tr an s fe r o f i m mo v ab l e p r o pe r ty ( I P)

i n I n d i a b y a p e r so n r e s i de n t o u t s i de I n d i a:

Des cr iptio n

1 W h o c a n a c qu i r e


NRIs

PIOs A p e rs o n wh o h a s es t ab l is h ed a b r an c h, o f fi c e o rother p lace of b us ines s in I nd ia

C e r t a i n o t h e r s p e c i f i ed c a t e g or i e s l i k e f o r e i gnn a t i o n al s * , d i p l om a t s ( s u b j e c t t o c e r t a i n c o n d i t i on s )

P urchas e B y w a y o f g i ft f r o m a p e r s o n r e s i de n t i n

I nd ia/NR I /P I O B y w a y o f i nh e r i t a nc e f r o m a p e r s o n r e s i de n t inI n di a o r a p e rs o n r e si d en t o u ts i de I n di a w h o h a da c q u i re d s u c h p r o p er t y i n a c co r d a n ce w i t ha p p l i ca b l e f o r e x l aw s a t t h e t i m e o f a c q ui s i t i o n ofp rop erty

B y i n w a r d r e m i t t an c e t h r o u gh n o r ma l b a n ki n gchannels or

B y d e b i t t o N R E / FC N R ( B) / N RO a c c o u n t

N o r e q u ir e m e n t t o f i l e a n y do c u m e nt w i th R B I a f t e r

acqui si ti on of i mmovabl e property by NRI/PIO

Forei gn nati onal s establ i shi ng a pl ace of busi nesshave to fi l e a decl arati on wi thi n 90 days from the

date of acqui si ti on wi th RBI.

N o r e s t r ic t i o n o n n u m be r o f p r o p e r ti e s t h a t c a n b e

purchased by an NRI or PIO .

A n y i m m o va b l e p r o p e rt y i n I n d i a ( o t h e r t h a n a nag ricultural p rop erty (AP ) / p lantation (P L)/ farm hous e(FH)#)

2 Ty p e o f p r o pe r t y

3

4

5

M o d e o f a c q u is i t i on

M o de o f p a ym e nt

Mis c

A. Acquisition

* F or ei gn n at io na ls o f n o n- In di a n o r ig in :

Req uire to ob tain p rior ap p rovals and fulfill the req uirements,if any p rescrib ed b y the other authorities (e. g. state government)

Can acq uire b y way of inheritance from a resid ent in Ind ia

C a n a c q ui r e p ro p er t y o n l e a se f o r a t e rm n o t e x c e ed i ng 5 y e ar s

P r oj e c t O f f i ce ( P O )Par ticular sS r. N o . B r an c h O f fi c e ( B O) L i ai s on Of f ic e ( LO )

as p er p res crib edformat on anannual b as is w ith

t h e D i r e c to rGeneral of P olice( D G P ) of t h e s t a t e

concerned

year S u b mi t a r e p o r t

as p er

p res crib edformat on anannual b as is

w i t h t h e D i r e c to rGeneral of P olice(D GP ) of thes t a t e c o n c er n e d

General of P olice(D GP ) of thes t a t e c o n c e rn e d


16/16

A c q u i si t i o n a n d s u b s eq u e n t t ra n s f e r o f i m m o va b l e p r o p er t i e s b y

a n N R I & P I O f o r a n e a sy r e fe r en c e i s s u mm a ri z ed as f o ll o ws :A c qu i si t io n / Tr a ns f er o f p r op e rt y i n I n di a b y a n I C RO I

2625

A c q ui s i t i on & Tr a n sf e r o f i m m o va b l e p r o pe r t y

o u t s id e I n d i a b y a pe r s on r e s i de n t i n I n d i a:


P ers on res id ent in I nd ia w ith certain cond itions I nd ian C omp any# for:

- b us ines s p urp os es- res id ential p urp ose of its s taff


A n y i m mo v ab l e p r op e rt y o u ts i de I n di a

3 M o d e o f a c q u is i t i on P u r c ha s e o u t o f f u n d s h e l d i n R e s i d en t f o r e i g nc u r r e nc y a c c o u nt

B y w a y o f g i ft f r o m a p e r s on r e s i de n t i n In d i a



P ers on res id ent in I nd ia w ith certain cond itions I nd ian C omp any# for:

- b us ines s p urp os es- res id ential p urp ose of its s taff



3 M o d e o f a c q u is i t i on P u r c ha s e o u t o f f u n d s h e l d i n R e s i d en t f o r e i g nc u r r e nc y a c c o u nt

B y w a y o f g i ft f r o m a p e r s on r e s i de n t i n In d i a


A. Acquisition

B. Transfer

# h a s to c o m p l y w i t h th e g u i d e li n e s i ss u e d b y t h e R B I f r o m t i m e t o t i m e .

Des cr iptio nPar ticular sS r. N o .P ers on res id ent in I nd ia1 W h o c a n t r a n sf e r


3 M od e o f t r an s fe r S ale Gift



A r e s i d en t i n d i v i d u a l1 W h o c a n r em i t

U S D 2 0 0 , 0 00 p e r f i n a n c i a l y e a r

3 For p ermitted cap ital or current account trans actionse.g.

Acq uis ition of immov ab le p rop erty I n v e s t me n t i n S h a r e s l i s t e d a n d u n l i s te d I nv es tment in d eb t ins trument I nv es tment in mutual fund s P ur c h a s e o f a n y o t h e r a s s e t l o c a t ed o u t s id e I n d i a remittance tow ard s g ifts & d onation P urchas e of ob j ects of art

2 U p t o w h at l i mi t

Liberalised Remittance Scheme (LRS):

4 Co mpliance P r e s cr i b e d a p p l i ca t i o n - cu m - d e cl a r a t i o n f o r m t o b e

f i l e d w i t h RB I .

Des cr iptio n

1 W h o c a n t r an s f e r


NR I s

PIOs*

S ale Gift

A p ers on res id ent in I nd ia NRI

PIO

A l l o w e d s u b je c t t o c e r t a i n c o nd i t i o ns & w i t h a

c e i l i n g o n h o w m u c h c an b e r e p a t r ia t e d I n c a s e o f r e s i d e nt i a l p r o p e r ty , r e p a t r ia t i o n o f s a l e

p r o c e ed s is r e st r i c t ed t o n o t mo r e t h a n t w o s u c hp rop erties

S a l e p r o c ee d s o f p r o p er t y a c q u i re d b y w a y o f g i f ts h ou l d b e c r ed i te d t o N R O a c co u nt o n l y

A n y I P i n I n di a ( o t h e r t h a n a n AP / P L / F H # )2 Ty p e o f p r o pe r t y

3

4

5

M o de o f t r an s fe r

To w h om

R e p at r i a ti o n o f f u n d so n tr ans fer

B. Transfer

I CROI

A c q u i re I P o t h e rth an AP/PL/FH T r a ns f e r I P

Pu rch ase Gift In h eritan ceIP (includ ing

AP/PL/FHacq uired as

Resid ent/Inherited

I P o t h er t h a nAP/PL/FH

An yon e R/I CROI / PI OROI R/ROI RI CROI /

PI OROI

ICRO I- Indian Citiz en ResidentO utside IndiaPIO RO I- Person of Indian O rig in Residentoutside IndiaR - R e s i d e n tR O I - R e s i de n t o u t s i d e I n d i a

A c qu i si t io n /Tr a ns f er o f p r op e rt y i n I n di a b y a n P I OR O IPI OROI

A c q u i re I P Tr a n s f e r I P

Residential/Commercial Property

AP/ PL / AH (acquiredby w ay ofinherit ance

O t h e r t h a nAP/PL/FHAn y I P

O t h e r t h a nAP/PL/FH

Pu rch ase Gift In h eritan ce S ale Gift/Sa le Gift/Sal e

An yon eR/I CROI /

PI OROI R/ROI RR/I CROI /

PI OROIR

Ty p e o f t r a n s ac t i o ns

fema booklet

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