RBI Consolidates
Circulars on Indian Investment Outside India in a Master Direction
[FED
Master Direction No.15/2024-25 dated 24 July 2024]
Master
Direction - Overseas Investment
Overseas
Investments by persons resident in India are governed by the provisions of
Foreign Exchange Management (Overseas Investment) Rules, 2022 (OI Rules)
notified by the Central Government vide Notification No. G.S.R. 646(E) dated
August 22, 2022 and Foreign Exchange Management (Overseas Investment)
Regulations, 2022 (OI Regulations) notified by the Reserve Bank vide
Notification No. FEMA 400/2022-RB dated August 22, 2022.
2.
In terms of Rule 3 of OI Rules, the Reserve Bank is empowered to administer
these Rules and to issue regulations and directions/ circulars as it may deem
necessary, for the effective implementation of the provisions of these Rules.
The Reserve Bank, therefore, issues directions to Authorised Persons under
Section 11 of the Foreign Exchange Management Act (FEMA), 1999. These
directions lay down the modalities as to how the foreign exchange business has
to be conducted by the Authorised Persons with their customers/ constituents
with a view to implementing the OI Rules and the OI Regulations.
3.
Instructions issued on Overseas Investment by persons resident in India have
been compiled in this Master Direction. The list of underlying circulars which
form the basis of this Master Direction is furnished in the Annex I. Reporting
instructions related to Overseas Investment are provided in Part VIII of Master
Direction no. 18 on ‘Reporting under Foreign Exchange Management Act, 1999’
dated January 01, 2016. AD Category-I Banks may bring the contents of these
Directions to the notice of their customers / constituents concerned.
4.
This Master Direction has been issued under sections 10(4) and 11(1) of the
Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions/ approvals, if any, required under any other law.
These
Directions shall be called Master Direction - Overseas Investment which shall
be read with the provisions contained in Foreign Exchange Management (Overseas
Investment) Rules, 2022 (hereinafter referred to as “OI Rules”) and Foreign
Exchange Management (Overseas Investment) Regulations, 2022 (hereinafter
referred to as “OI Regulations”).
|
Para. No. |
Particulars |
|
1 |
Part I - Definitions
and associated details |
|
|
Part II – General
provisions |
|
2 |
Exemptions from
applicability of OI Rules/Regulations/Directions |
|
3 |
Permission for making
overseas investment |
|
4 |
Approval from the
Central Government |
|
5 |
Approval from the
Reserve Bank |
|
6 |
No Objection
Certificate (NOC) from the lender bank/regulatory body/investigative agency |
|
7 |
Rights issue and
bonus shares |
|
8 |
Acquisition of a
foreign entity through bidding or tender procedure |
|
9 |
ODI in startups |
|
10 |
Acquisition or
transfer by way of deferred payment |
|
11 |
Mode of Payment |
|
12 |
Pricing Guidelines |
|
13 |
Transfer or
liquidation |
|
14 |
Restructuring |
|
15 |
Opening of Foreign
Currency Account abroad by an Indian entity |
|
16 |
Obligations of the
Person Resident in India |
|
17 |
Reporting |
|
18 |
Delay in Reporting |
|
19 |
Restriction on
further financial commitment or transfer |
|
20 |
Restrictions and
prohibitions |
|
|
Part III – Specific
provisions |
|
21 |
Financial commitment
by an Indian entity |
|
22 |
Overseas investment
by resident individuals |
|
23 |
Overseas investment
by a person resident in India, other than an Indian entity or a resident
individual |
|
24 |
Overseas investment
in an IFSC in India by a person resident in India |
|
25 |
Acquisition or
Transfer of Immovable Property outside India |
|
|
Part IV - Other
Operational Instructions to AD banks |
|
26 |
Designated banks |
|
27 |
Overseas investment
under OI Rules/Regulations |
|
28 |
General procedural
instructions for online reporting |
|
- |
Appendix A: Request
Form for creation of user id in the OID Application |
|
- |
Annex I: List of
Circulars which have been consolidated in this Master Direction |