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FDI in INDIA


FDI  
  • When an organization deals with foreign currency, it has to comply with all regulatory requirements. There are requirements from your bankers who support you to make available foreign currency.
  • There are requirements laid down by RBI where in companies needs to submit the information in periodically in return form.
  • Company auditors ask you to disclose the foreign currency income and expenditure details in your annual financials. 

Steps/Process of FDI:

1. Submission of proposal and uploading documents (mentioned below) on Foreign Investment Facilitation Portal.

2. Department of Industrial Policy and Promotion (DIPP) assigns the case to the concerned Ministrywithin 2 working days. 
           a. Submission of physical copies to concerned department is not required in case of digitally
signed documents.
b. For applications not digitally signed, online communication to applicant will be made to submit onesigned physical copy of the proposal to the Competent Authority. Applicants are required to submit required documents within 5 days of such intimation.
 
3. The proposal is circulated online within 2 days to Reserve Bank of India for review from FEMA. All proposals are shared with Ministry of External Affairs (MEA) and Department of Revenue (DoR) for record. Any advice/comments from above mentioned departments are directly shared with concerned Administrative Ministry/Department assigned to decide on the proposal.
                         
4. Proposals are scrutinized within 1 week and additional information/clarifications, if required, areasked for.
 
5. On getting all required information, the Competent Authority is required to give out its decision in next two weeks. Approval/rejection letters are sent online to the applicant, consulted Ministries/Departments and DIPP.
 
> Where total foreign equity inflow is more than Rs 5000 crore, the Competent Authority is required toplace the same to Cabinet Committee on Economic Affairs for consideration within timelines.
  • Following documents are required to be uploaded along with the proposal. Please note, this list is notan exhaustive list - other documents may be required based for specific cases.  
1. From both Investee & Investor Companies/Entities:
a. Certificate of Incorporation
b. Memorandum of Association (MOA)
c. Board Resolution
d. Audited Financial Statement of Last Financial Year
e. Article of Association
 
2. List of Names, addresses and identification proof of all foreign collaborators of the Investor Company/Entity.

3. Pre-and Post-investment shareholding pattern of the Investee Company.

4. An Affidavit stating that all information provided in hard copy and online is the same and correct.

5. In case of existing ventures, copy of joint venture agreement/shareholders' agreement/ technology transfer/trademark/brand assignment agreement (as applicable).

6. Copy of Downstream Intimation. 

7. Copy of relevant past FIPB/SIA/RBI approvals, connected with the current proposal. 

8. Relevant Foreign Inward Remittance Certificate (FIRC) in case investment has already flowed in.

9. High Court order in case of scheme of arrangement.

10. Valuation certificate as approved by a certified Chartered Accountant.
 
Note-
  • The interested parties who are involved in dealing with foreign currency in India, They are listed as below:
I. Reserve Bank of India
II. Foreign Exchange Management Act
III. Buyer from India who imports the goods and services from outside India
IV. Seller from India who exports the goods and services to outside India
V. Bankers / Financial Institutions
VI. SEBI
VII. Individual from India
VIII. Licensed agent approved by Reserve Bank of India
 
  • An international money transfer can take 1-5 days to be processed, depending on where the money is being sent to and from, and the provider doing the transfer.
  • Once it’s processed on the sender’s end, your bank should generally be able to put the deposit into your account on the same business day they receive it.
  • In order to get your hands on the funds, you’ll need to give the sender a few details, including:
    • ​The name of your bank
    • Your BSB
    • Your account number
    • Your account name
The BIC/SWIFT CODE - this is an international banking code that will help identify your bank


Thank You 

Complied and prepared by

Pushkar Gaur
Kotwani Anil Kumar & Associates (KAKA)
Chartered Accountants
A-73, Lajpat Nagar-2,
New Delhi-110024

Disclaimer: Above article is true and complete to the best of our knowledge. It is our interpretation of law, others may take different opinion or view.