Complete guide to foreign investment regulations in India. Learn about FEMA regulations, RBI compliance, FDI policy, foreign exchange regulations, and get expert assistance.
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Complete guide to foreign investment regulations in India. Learn about FEMA regulations, RBI compliance, FDI policy, foreign exchange regulations, and expert assistance for foreign investors.
Foreign investment in India is regulated by FEMA (Foreign Exchange Management Act) and RBI. The regulations cover FDI policy, foreign exchange transactions, reporting requirements, and compliance obligations.
FEMA (Foreign Exchange Management Act) is the primary legislation governing foreign exchange transactions in India. It regulates foreign investments, remittances, and foreign exchange dealings.
Foreign investments must be reported to RBI through FC-GPR (within 30 days of share issuance), FC-TRS (for share transfers), and annual returns. Non-compliance can result in penalties.
Most sectors allow 100% FDI under automatic route without prior RBI approval. However, post-investment reporting to RBI is mandatory. Some sectors require government approval.
Non-compliance with FEMA regulations can result in penalties up to three times the amount involved, or ₹2 lakhs, whichever is higher. Continued non-compliance can lead to additional penalties and legal action.
FC-GPR (Foreign Currency-Gross Provisional Return) is filed with RBI within 30 days of share issuance to report foreign investment. It is mandatory for all foreign investments in Indian companies.
Most sectors allow 100% FDI under automatic route. However, some sectors like defense, media, and certain services have restrictions or require government approval. Check FDI policy for sector-specific limits.
Automatic route allows FDI without prior approval - just post-investment reporting. Government route requires prior approval from concerned ministry before making the investment.
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