The Reserve Bank of India had issued Notification No. FEMA 20 /2000-RB dated 3rd May 2000 on Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000to prohibit, restrict or regulate, transfer or issue security by a person resident outside India.
These regulations have been made and effect from June 1, 2000 under the Foreign Exchange Management Act,1999 and are applicable on all types of Capital, i.e., equity shares, preference shares, convertible preference shares and convertible debentures. An Indian company issuing shares or convertible debentures in accordance with the said Regulations shall submit to Reserve Bank of India (RBI):
The said regulations have also defined two types of routes, i.e., Automatic route and Approval route. Under Automatic Route, Government approval is not required which is the case under approval route. However, these routes are entirely depending upon the list of activities which an Indian/reporting company is undertaken.
All the reporting requirements were to be done in physical form prior to RBI’s circular on Foreign Direct Investment –Reporting under FDI Scheme on the e-Biz platform dated February 12, 2015. Post this circular, Indian Companies were enabled to file returns with the Reserve Bank of India on the e-Biz platform as an additional facility viz.
RBI has recently issued a circular on Foreign Direct Investment –Reporting under FDI Scheme, Mandatory filing of Form ARF, FCGPR and FCTRS on e-Biz platform and discontinuation ofphysical filing from February 8, 2016 dated February 1, 2016 on the reporting of Foreign Direct Investment (FDI) only in online mode through e-Biz portal will be acceptedand the physical filing of the following forms will be discontinued from February 8, 2016 onwards.
After this online facility of submission of documents, FDI reporting would be easier for Indian Companies. However, practicality will be seen post February 8, 2016 once all the reporting is made online and an option of submission of physical documents will no more be available.
List of activities or items for which automatic route of Reserve Bank for Investment from Persons Resident Outside India is not available
This document is intended to give an update on IEOF rules and should not be regarded as offering a complete explanation of the matters referred to. The contents of this document are solely for informational purpose. It does not constitute professional advice or a formal recommendation. You are requested to seek professional guidance and advice before acting on any of the matters dealt with in this document.
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