A. Yes. Direct investment through the medium of a SPV is permitted under the Automatic Route.

A. Where the JV/WOS has been established through a SPV all funding to the operating subsidiary should be routed through the SPV only. However, in the case of guarantees to be given to the step down subsidiary these can be given directly by the Indian Party provided such exposures are within the permissible financial commitment of the Indian Party.

A. The shares of a JV/WOS can be pledged as a security for availing fund based or non-fund based facility for the concerned entity or for the JV/WOS from an authorised dealer/ public financial institution in India.

A. An Indian Party will have to comply with the following: -

1. receive share certificates or any other documentary evidence of investment in the foreign entity to the satisfaction of the Reserve Bank within six months, failing which an application for extension of time citing reasons for non-receipt will have to be made to the Reserve Bank.
2. repatriate to India, all dues receivable from the foreign entity, like dividend, royalty, technical fees etc., within 60 days of its falling due, or such further period as the Reserve Bank may permit.
3. submit to the Reserve Bank every year, within 60 days from the date of expiry of the statutory period, as prescribed by the respective laws of the host country for finalisation of the audited accounts of the JV/WOS outside India, an Annual Performance Report in form APR in respect of each JV or WOS outside India set up or acquired by the Indian party. This APR should inevitably be accompanied by :
   1. copies of FIRCs in support of inward remittances on account of dividend, royalty, etc.;
   2. audited Financial Statements of the overseas venture;
   3. certificate from a chartered accountant in support of realization of export proceeds;
   4. a note on the working of the JV/WOS during the previous year highlighting the ups and downs, reasons for non-performance, etc. in monetary terms.

In case the promoter company is unable to submit APRs within the stipulated time, an application on the due date should be made to the Reserve Bank of India seeking extension, giving reasons for the same.

A. Reserve Bank takes a serious view of delayed submission/non-submission of such reports and can take such measures against the delinquent Indian Party as it deems fit.

A. No prior approval of the Reserve Bank is required for disinvestment, either by way of sale to another Indian Party (which is eligible to make such investments under the Automatic Route) or to a person resident outside India, provided ,

1. the disinvestment does not result in a write-off (however, listed Indian companies have been permitted a write-off of capital upto 10% of the previous years export realization);
2. the overseas concern has repatriated all its dues;
3. the overseas concern has been in operation for at least one year and has submitted upto date APR with the prescribed documents;
4. the Indian Party is not under investigation by any investigative/ regulatory authority;
5. the sale is to be effected through a stock exchange where the shares of the overseas JV or WOS are listed;
6. if the shares are not listed on the stock exchange, and the disinvestment is by private arrangement, the sale price of the share is not less than the value certified by a Chartered Accountant/Certified Public Accountant/Category I Merchant Banker registered with SEBI.

The above conditions are applicable even when an Indian Party wants to windup/close its existing JV/WOS.

A. The Indian Party may apply for disinvestment to the designated Authorized Dealer/Reserve Bank (in case the proposal is not eligible to be considered by the Authorized Dealer) with the following documents/information :

1. letter giving the reasons for the disinvestment;
2. latest Annual Performance Report on the working of the JV/WOS;
3. certified true copy of the Board Resolution approving the disinvestment and indicating the amount of disinvestment approved;
4. letter of offer from the purchaser;
5. consent letter from the partners in case of disinvestment of share in a JV abroad;
6. valuation certificate on the value of shares of the JV/WOS;
7. certificate from a Chartered Accountant certifying that no dues are outstanding to the Indian party or indicating the details of dues, if any, from the JV/WOS to the Indian party.

A. Resident individuals can acquire/sell foreign securities without prior approval in the following cases: -

1. as a gift from a person outside India;
2. by way of ESOPs issued by a company incorporated outside India under Cashless Employees Stock Option Scheme which does not involve any remittance from India;
3. by way of ESOPs issued to an employee or a director of Indian office or branch of a foreign company or of a subsidiary in India of a foreign company or of an Indian company in which foreign equity holding is not less than 51 per cent;
4. by inheritance from a person whether resident in or outside India;
5. by purchase of foreign securities out of funds held in the Resident Foreign Currency Account maintained in accordance with the Foreign Exchange Management (Foreign Currency Account) Regulations, 2000;
6. by way of bonus/rights shares on the foreign securities already held by them;
7. by way of shares in listed overseas companies that have at least a 10% share in an Indian company listed on a recognized stock exchange in India as on 1st January of the year of investment;
8. by way of rated debt securities issued by companies as at vii.

A. Yes. Listed Indian Companies can invest upto 25 % of the net worth in overseas companies, listed on a recognized stock exchange, that have at least 10% share in an Indian company listed on a recognized stock exchange in India as on 1st January of the year of investment or by way of rated debt securities issued by the same companies. However, this 10 % holding should be a direct holding and not through a subsidiary or a SPV.

A Yes, resident individuals can make investments in foreign securities upto USD 25000/ per annum . Such investment could also be made in shares of JV/WOS set up abroad by Indian companies, provided there is a foreign exchange outgo; subject to reporting requirements.

A Yes, Reserve Bank has given general permission to a resident individual to acquire foreign securities to the extent of the minimum number of qualification shares required to be held for holding the post of Director provided such shares do not exceed 1% of the paid-up capital of the company and the amount to be remitted for such shares does not exceed USD 20,000/ in a calendar year.

A. Yes, a resident individual may acquire foreign securities by way of rights shares issued by a company incorporated outside India provided the existing shares were held in accordance with the provisions of the law.

A Yes, Reserve Bank on an application, will permit the individual employees/directors of an Indian promoter company engaged in the field of software for acquisition of shares of a JV/WOS abroad provided :

1. the consideration for purchase does not exceed USD 10,000/ or its equivalent per employee in a block of five calendar years;
2. the shares acquired by all the employees/directors do not exceed 5% of the paid-up capital of the Joint Venture or Wholly Owned Subsidiary outside India, and
3. after allotment of such shares, the percentage of shares held by the Indian promoter company, together with shares allotted to its employees is not less than the percentage of shares held by the Indian promoter company prior to such allotment.

Further, Reserve Bank may also on an application, made to it, by an Indian company engaged in the field of software allow its resident employees (including working directors) to purchase foreign securities under the ADR/GDR linked stock option scheme provided the consideration for purchase does not exceed USD 50,000/ or its equivalent in a block of five calendar years.