FDI in Limited Liability Partnership (LLP) Allowed
[RBI
Circular No. 123 dated 16th April 2014]
Sub:
Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP)
Attention
of Authorised Dealer Category - I (AD Category - I) banks is invited to Schedule
I to the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000 (The Principal Regulations), notified
vide Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time
to time. In terms of extant instructions, only a Company incorporated under the
Companies Act, 1956 or a Venture Capital Fund is eligible to accept FDI.
2. It has now
been decided that Limited Liability Partnership (LLP) formed and registered
under the Limited Liability Partnership Act, 2008 shall be eligible to accept
Foreign Direct Investment (FDI) subject to the conditions given in Annex I.
3. A copy of
Press Note No. 1 (2011 series) dated May 20, 2011 issued in this regard by
Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce
& Industry, Government of India is enclosed. A reference is also drawn to
paragraph 3.2.5 of the Consolidated FDI Policy Circular 1of 2013 dated April 5,
2013 issued by DIPP, in the matter.
4. Reserve Bank
has since amended the Principal Regulations through the Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India)
(Third Amendment) Regulations, 2014 notified vide Notification No. FEMA. 298
/2014-RB dated March 13, 2014 c.f. G.S.R. No.190(E) dated March 19, 2014.
5. The
instructions issued in this circular shall be effective from May 20, 2011.
However, reporting requirement of FDI in LLP shall come into force from the
date of issue of instructions by the Reserve Bank in this regard. The LLP which
have received foreign investment in terms of FIPB approval between May 20, 2011
to the date of this circular, shall comply with the reporting requirement in
respect of FDI within 30 or 60 days, as applicable, from the date of this circular.
6. AD Category –
I banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
7. The directions
in this circular have been issued under Sections 10(4) and 11(1) of Foreign
Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law.