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FEMA

Surendra (Finance) (71 Points)

31 December 2007

If the company receives any FDI, is there any compliance requirement under FEMA pre or post remittance?

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19 Replies

Anand (481 Points)
Replied 31 December 2007

yeah you have to intimate the concerned RO of RBI with respect the inward remmittance and allotment of shares

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Kumar (Legal Consultant) (358 Points)
Replied 31 December 2007

Dear Surendra,

You have to initimate the RO of RBI within thirty days from the date of receipt of money also you have to file the form FC-GPR within thirty days from the allotment of shares.

With best Regards,
Rakesh

shilpa (company secretary in practice) (148 Points)
Replied 02 January 2008

1. Provisions of FEMA ¡V (a) Ensure that the main object of the proposed Company fits in the Foreign Direct Investment Scheme or whether there is requirement of FIPB approval. As per FEMA- „X Certain Activities are specified for which foreign direct investment is prohibited (Annexure I) „X Sectoral cap is specified for certain activities for which permission of RBI is not necessary (Annexure II) „X Prior permission of RBI is required in case of certain activities (Annexure III) Also, prior permission of FIPB / SIA is required where the foreign promoter already has a tie-up in India through investment in shares/ debentures, or a technical collaboration agreement or trade mark agreement or investment by any other mode in the same or allied field in which proposed company wishes to be engaged in. (b) RECEIPT OF FIRC: The bank through which the foreign exchange is brought in will issue a Foreign Inward Remittance Certificate. Once the FIRC is received by the Company it is required to give an intimation to the Reserve Bank of India within 30 days from the receipt of the same with certified copy of the FIRC. (c) Allotment of shares: The shares should be allotted within 30 days from the receipt of FIRC. (d) A REPORT TO Reserve Bank of India in FC- GPR form: A report in form FC-GPR should be given to RBI within 30 days from the receipt of FIRC along with (e) Certificate from a Company Secretary of the Company or a whole time Practicing Company Secretary that provisions of the Act, Rules and Regulations had been complied with. (f) Certificate from Statutory Auditors or Chartered Accountant indicating the manner of arriving at the price of the shares issued to a person Resident outside India. (g) Declaration as specified in Form FC-GPR. (h) Memorandum and articles of Association of the Company shall be enclosed with the form. Annexure I List of activities for which foreign direct investment is prohibited 1. Retail Trading 2. Atomic Energy 3. Lottery Business 4. Gambling and betting 5. Housing and Real Estate Business 6. Agriculture (excluding Floriculture, Horticulture, Development of Seeds, Animal Husbandry, Pisiculture and Cultivation of Vegetables, Mushrooms etc. under controlled conditions and services related to agro and allied sectors) and Plantations Annexure II Sectoral Cap (i.e. Maximum Limit) on investment by Foreign Persons Activity Sectoral Cap Private Sector Banking 49% NBFCs 100% Insurance 26% Telecommunication 49% Petroleum Refining (Private Sector) 100% Housing and Real Estate 100% Coal & Lignite 100% or 74 % (Conditional) Venture Capital As per SEBI regulation Trading 100% or 51% (Conditional) Power 100% Drug and Pharmaceuticals 100% Road and highways, Ports and harbours 100% Hotel & Tourism 100% Mining 74% Advertising 100% Films 100% Airports 74% Mass Road Transport Systems 100% Pollution Control & Management 100% SEZ 100% SSI 24% Residual (Not covered above or not prohibited as per Annexure I or not covered under Annexure III ) 100% Annexure III List of Activities for which prior permission of RBI will be required for foreign direct investment 1. Domestic Airlines 2. Petroleum Sector (Excluding private sector) 3. Investment companies in infrastructure and services sector 4. Defence Strategic industries 5. Atomic Minerals 6. Print Media 7. Broadcasting 8. Postal Services 9. Courier Services 10. Establishment and Operation of Satellite 11. Development of Integrated Township 12. Tea Sector

Sabitha (Analyst) (35 Points)
Replied 04 January 2008

Hi If a captive unit of a foreign company receives advance amount for future services, is there any compliance requirement under FEMA pre or post remittance?

Sabitha (Analyst) (35 Points)
Replied 04 January 2008

Hi If a captive unit of a foreign company receives advance amount for future services, is there any compliance requirement under FEMA pre or post remittance?

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(Guest)

In case the amount is received from NRE account maintained in Rupee currency, can the Recepient bank give a FIRC (Foreign exchange Inward Remittence Certificate)?

Batuk Maniar (Professionals) (0 Points)
Replied 07 May 2008

Dear Sir,

While filing a form FC-GPR, a question has come up on SSI. My friend who is NRI and intends to invest 50% in existing jewellery unit in SEZ. The investment will be made by OCB.

Existing Unit CEO says that my friend can not invest more than 24 % as unit located in SEZ are recognised as SSI unit and therefore there is cap.

In my view this is wrong. They should write in FC-GPR that they are not as such as SSI as unit in SEZ is governed by SEZ policies and not as per industrial policy in general which are applicable for non-sez unit.

Please clarify

Regards,

Pankaj

(Guest)

Is the reporting of inward remittances to RBI responsibility of a consultant Auditor/Accoutant or Company Secretary or Lawyer who Incorporated the Subsidiary?

(Guest)

Is the reporting of inward remittances to RBI responsibility of a consultant Auditor/Accoutant or Company Secretary or Lawyer who Incorporated the Subsidiary?

(Guest)

Is the reporting of inward remittances to RBI responsibility of a consultant Auditor/Accoutant or Company Secretary or Lawyer who Incorporated the Subsidiary?