Fema for company abroad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2013 I would like to know if a resident Indian sets up a company abroad, assuming he is the only owner of the company, do FEMA laws apply to that company ? Is the foreign entity required to repatriate the profits to India under FEMA, or is it not required ?

Hardik A. Mehta

Hardik A. Mehta (Expert)
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10 September 2013 As per the recent circulars issued by RBI, an individual is permitted to set up a Joint Venture / Wholly Owned Subsidiary outside India subject to the conditions laid out in the circular. The maximum amount that can be utilised by an individual for setting up a JV / WOS is USD 75000. Further please note the amount of dividend if any earned it needs to repatriated back to India within 60 days . Additionally please that individual will also have to do annual compliances as mentioned I'm Regulation 15 of FEMA Notification 120

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2013 Hello Hardik,

Thanks for the quick response. That was elegant, but do you know if it is obligatory to declare dividend or not ? I am assuming the head and the brain of the country is in India, so it is effectively an Indian company. In that case, isn't there any obligation to repatriate the earnings, even if dividend is not declared ?

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