FEMA (Opinions)

FEMA – Utilization of ECB for onlending to SPC – July 2016

FEMA – Utilization of ECB for onlending to SPC – July 2016

FEMA – Utilization of ECB for onlending to SPC – July 2016
1.    Background XYZ Limited (XYZ) is proposing to avail funding through External Commercial Borrowings (“ECBs”) under the automatic route. It proposes to utilize the ECB proceeds for on-lending to its Special Purpose Vehicle (SPV) for project use in infrastructure sector. Such SPV has been set up to undertake execution of infrastructure projects on turnkey basis

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FEMA – Transfer of Loan under ODI between Indian Parties – June 2016

FEMA – Transfer of Loan under ODI between Indian Parties – June 2016

FEMA – Transfer of Loan under ODI between Indian Parties – June 2016
1.    Background ABC I.Co. and XYZ I.Co., both Indian companies have invested in a Wind Power Project in Africa under the Overseas Direct Investment Scheme (‘ODI’) of Foreign Exchange Management Act, 1999 (‘FEMA’). Such ODI has been made by ABC I.Co. through its Singapore subsidiary and by XYZ I.Co. through its Mauritius subsidiary. Due to

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FEMA – LRS for Immovable Property property & Companies abroad – May 2016

FEMA – LRS for Immovable Property property & Companies abroad – May 2016

FEMA – LRS for Immovable Property property & Companies abroad – May 2016
  1. Background:  Mr. X, a resident Indian is considering acquisition of immovable property abroad for which remittance is required to be made from India.   2. Issue under consideration: Whether Mr. X can remit foreign exchange abroad under the provisions of Foreign Exchange Management Act, 1999 (‘Act’) for acquisition of immovable property abroad and

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FEMA – Note on Period of Realisation of Export Dues under FEMA – April 2016

FEMA – Note on Period of Realisation of Export Dues under FEMA – April 2016

FEMA – Note on Period of Realisation of Export Dues under FEMA – April 2016
XYZ LTD. NOTE ON PERIOD OF REALISATION OF EXPORT DUES UNDER FEMA S.  No. Alternative methods  of Exports Time-limit for realisation & repatriation to India Other conditions 1. Export from India Within 9 months from date of export Normal documentation conditions as applicable to all exports. 2. Consignment exports Against shipping documents, Consignee to give

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FEMA – FDI in LLPs – April 2016

FEMA – FDI in LLPs – April 2016

FEMA – FDI in LLPs – April 2016
  FEMA PROVISIONS – FOREIGN DIRECT INVESTMENT IN LLP   I. FEMA REGULATIONS RELATING TO FDI IN LLPs VIDE NTF. 298 DT. 13.03.2014 w.e.f. 20.05.2011 Schedule 9 of FEMA Ntf. 20 [See Regulation 5(9)] Scheme for Acquisition/ Transfer by a person resident outside India of capital contribution or profit share of Limited Liability Partnerships (LLPs)

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FEMA – Implications under FDI for Contract Manufacturing – Feb. 2016

FEMA – Implications under FDI for Contract Manufacturing – Feb. 2016

FEMA – Implications under FDI for Contract Manufacturing – Feb. 2016
NOTE ON IMPLICATIONS FOR A.Co. UNDER MANUFACTURING SECTOR AS PER FDI POLICY 1.  Background: A.Co. is engaged in the business of designing, manufacturing and sale of apparel in India through franchise stores. Though the actual manufacture of the apparel is done by a third party under contract manufacturing arrangement, an analysis of A.Co.’s functions clearly

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SEBI & Income Tax – Implications for Inter se transfer of listed shares – Feb. 2016

SEBI & Income Tax – Implications for Inter se transfer of listed shares – Feb. 2016

SEBI & Income Tax – Implications for Inter se transfer of listed shares – Feb. 2016
IMPLICATIONS FOR MR. X FOR INTER-SE PROMOTER GROUP TRANSFER OF LISTED SHARES 1.    Background: We understand that Mr. X is part of Promoter group of the listed company and he is disclosed as such in the Company’s filings with stock exchange under the listing agreement. As per information available, he is non-resident under Foreign Exchange

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FEMA – Remittance by NRIs – Feb 2016

FEMA – Remittance by NRIs – Feb 2016

FEMA – Remittance by NRIs – Feb 2016
  1.    Background Mr. X is a Non-Resident Indian (‘querist’) under the Foreign Exchange Management Act, 1999 w.e.f. 01.04.2014 as he took employment with a company in U.K. However, he is tax resident of India and holds various assets in India on which regular income is earned. These assets and investments have been acquired by

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FEMA – Implicaitons for Portfolio Management Schemes – Dec 2015

FEMA – Implicaitons for Portfolio Management Schemes – Dec 2015

FEMA – Implicaitons for Portfolio Management Schemes – Dec 2015
1. Background: 1.1    XYZ Financial Services Limited (‘XYZFSL’) has a PMS license which allows XYZFSL to run schemes on discretionary and non discretionary basis. 1.2    XYZFSL PMS had invested on behalf of 110 clients in an unlisted security – CCPS (Compulsory Convertible Preference Shares) of ABC Hospital in November 2010. XYZFSL PMS had created a

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FEMA – Remittance by Residents & Trust – Oct 2015

FEMA – Remittance by Residents & Trust – Oct 2015

FEMA – Remittance by Residents & Trust – Oct 2015
1.    Background XYZ Trust is a private, irrevocable Trust set up under the provisions of the Indian Trusts Act, 1882 by the Settlor. The Trustees of the said Trust are residents in India. The beneficiaries are Non-resident Indians (“NRIs“). All the assets under the Trust are located in India. As per the terms of the

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FEMA – Obiligations under ODI & Violations – Aug. 2015

FEMA – Obiligations under ODI & Violations – Aug. 2015

FEMA – Obiligations under ODI & Violations –  Aug. 2015
OPINION NOTE ON OVERSEAS INVESTMENT BY INDIAN COMPANY IN WHOLLY OWNED SUBSIDIARY (FZE) IN UAE  Q.1.   Current violations with respect to Indian FEMA / Tax and other laws and how to comply with same in order to regularize the matter. A.1.    Direct Investments outside India are regulated by RBI under Foreign Exchange Management (Transfer or

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FEMA – Gift of shares acquired under LRS – July 2015

FEMA – Gift of shares acquired under LRS – July 2015

FEMA – Gift of shares acquired under LRS – July 2015
1. Background: Mr XY (“XY”), his wife Mrs. AB (“AB”) and their daughter Ms CD (“CD”) are all persons resident in India (hereinafter referred to as the ‘querists’) for the purposed of Foreign Exchange Management Act, 1999 (“FEMA”) and the regulations made there under. The querists have invested in a foreign company incorporated in Singapore

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FEMA 20 – Purchase of Shares by NRI on non-repatriation basis – May 2015

FEMA 20 – Purchase of Shares by NRI on non-repatriation basis – May 2015

FEMA 20 – Purchase of Shares by NRI on non-repatriation basis – May 2015
1.Background: Mr. A was a non-resident Indian (‘NRI’) in the year 2000 when he acquired 5,000 equity shares in XYZ Limited (“Company”) by way of allotment on 01.04.2000 on non-repatriation basis. As stipulated under the erstwhile FERA, a declaration under Form ‘DIN’ dt. 20.05.2000 was submitted to RBI declaring that the investment in Indian company

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FEMA – Note on Proprietory Trading Overseas – April 2015

FEMA – Note on Proprietory Trading Overseas – April 2015

FEMA – Note on Proprietory Trading Overseas – April 2015
NOTE OF PROPRIETARY TRADING IN OVERSEAS EXCHANGES BY RESIDENT INDIANS 1. Background Resident Indians or entities such as companies or partnership firms are desirous of undertaking proprietary trading on foreign stock / commodity exchanges in various asset classes such as equities, derivatives on equities, Foreign Exchange (Fx) and commodities / derivatives on commodities. For the

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Custodian Account for Holding of Investments in Listed Securities in India – April 2015

Custodian Account for Holding of Investments in Listed Securities in India – April 2015

Custodian Account for Holding of Investments in Listed Securities in India – April 2015
1.    Background ABC Venture Holding Company Ltd. (“the Company” or “Querist”) is holding investments in the shares of XYZ Services Ltd., a listed company in India. The investments are held in the demat account with DEF Securities Pvt. Ltd.   2.     Question for consideration The queriest has sought our opinion on requirement for opening

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FEMA – Repayment of Trade Credits – Dec. 2014

FEMA – Repayment of Trade Credits – Dec. 2014

FEMA – Repayment of Trade Credits – Dec. 2014
1.    Background 1.1 ABC Private Limited (“ABC India” or the “Querist”) is a company incorporated in India on 01st May, 2009.  It’s parent company is ABC Holding Limited (“ABC UK”), a company incorporated in the United Kingdom. It has a group company XYZ UK Limited (“UK Group Co.”) which is also incorporated in the United

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FEMA – Loan to Non Residents under Liberalised Remittance Scheme – Dec. 2014

FEMA – Loan to Non Residents under Liberalised Remittance Scheme – Dec. 2014

FEMA – Loan to Non Residents under Liberalised Remittance Scheme – Dec. 2014
1.    Background Shri XYZ, a person resident in India, intends giving a loan of US$ 100,000/- to ABC FZC under the Liberalized Remittance Scheme (‘LRS‘) under FEMA.   2.    Question for consideration The querist seeks clarification as to: a)  Whether remittance can be made under LRS without obtaining the permission of Reserve Bank of India

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FEMA 20 – FDI in Retail Trading on non-repatriable basis – Dec. 2014

FEMA 20 – FDI in Retail Trading on non-repatriable basis – Dec. 2014

FEMA 20 – FDI in Retail Trading on non-repatriable basis – Dec. 2014
1. Background 1.1. XYZ Distribution Private Limited (‘XYZ’ or the ‘querist’) is a company  incorporated in Mumbai in 2013.  It is in the business of retail trading of building materials.  Principally, it deals in steel rods, cement, cables and other building materials of various brands. 1.2. XYZ wishes to issue and allot shares to two

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FEMA 16 Reimbursement to Guarantor on invocation of SBLC Sept 2014

FEMA 16 Reimbursement to Guarantor on invocation of SBLC Sept 2014

FEMA 16 Reimbursement to Guarantor on invocation of SBLC Sept 2014
Background 1.1          XYZ India Ltd. (“XYZ”), a Person Resident in India (‘PRII’) has availed credit facilities from ABC Bank Ltd., a PRII which are guaranteed by way of a Standby Letter of Credit (“SBLC”) No. 123456 dt. 5th May, 2014 issued by DEF Bank, India for an amount of INR 112 million. 1.2          The SBLC

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FEMA 120 – ODI Step-down subsidiaries & Re-routing – Aug. 2014

FEMA 120 – ODI Step-down subsidiaries & Re-routing – Aug. 2014

FEMA 120 – ODI Step-down subsidiaries & Re-routing – Aug. 2014
1.    Background The XYZ Group is considering Overseas Direct Investment in a Joint Venture / Wholly Owned Subsidiary (“JV/WOS”) in Singapore viz. XYZ Analytics Pte Ltd., Singapore (“XYZ-SG”). This investment is planned through an SPV Co. in Singapore. As part of its Business Plan, XYZ-SG has invested in a step-down subsidiary in India viz. XYZ

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FEMA 120 – Acquisition of Sweat Equity In Foreign Company by PRII – August 2013

FEMA 120 – Acquisition of Sweat Equity In Foreign Company by PRII – August 2013

FEMA 120 – Acquisition of Sweat Equity In Foreign Company by PRII – August 2013
1. Background XYZ Inc. (‘XYZ’) is a start up company being set up in Manila, Philippines. It has developed several linkages with India including an Investor family which is India based and the main supplier of generic drugs has also been identified in India. In all these efforts it has regularly sought the advice /

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FEMA 8 – Guarantee By PRII in Favour of Foreign Step Down Subsidiary July 2013

FEMA 8 – Guarantee By PRII in Favour of Foreign Step Down Subsidiary July 2013

FEMA 8 – Guarantee By PRII in Favour of Foreign Step Down Subsidiary July 2013
1.    Background   i.  XYZ Limited (XYZ) is an Indian subsidiary of ABC Ltd. (ABC). ABC holds 74% stake in XYZ. ii.  LMN SA, Spain (‘LMN’) is a subsidiary of XYZ, where XYZ holds 77%. The balance 23% is held by XYZ International PTE Ltd (XYZIIPL), Singapore which is a wholly owned subsidiary of XYZ.

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LRS – Acquisition of Shares in Foreign Company under LRS – June 2013

LRS – Acquisition of Shares in Foreign Company under LRS – June 2013

LRS – Acquisition of Shares in Foreign Company under LRS – June 2013
1.    Background The Managing Director of XYZ Group, India (‘querist’) intends to acquire 100% share capital of a company in Ras Al Khaimah (Free Trade Zone), UAE. The share capital comprises 500 equity shares aggregating AED 5,00,000 equivalent to about Rs. 75 lakhs. 2.    Question for consideration The querist seeks clarification as to: a)    Whether

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Implications under FEMA on EPC Contracts granted to non-resident contractors – May 2013

Implications under FEMA on EPC Contracts granted to non-resident contractors – May 2013

Implications under FEMA on EPC Contracts granted to non-resident contractors – May 2013
1.    Background 1.1  XYZ Company Ltd. (‘XYZ’) is developing a 3,040 MW Thermal power plant in India. It has received the approval from Maritime Board for the establishment of an all weather captive port. 1.2  For developing the captive port, XYZ has entered into a contract with ABC Ltd. (‘ABC’) / its SPV. ABC has

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