1. For ODI under Automatic route:
Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for making overseas direct investments in a JV/WOS abroad. Indian Parties / Resident Individuals are required to follow below mentioned procedure for ODI in WOS/JV:
Subsequent remittances (or financial commitment) under the automatic route and remittances (or financial commitment) under the approval route should be made, only after receipt of auto generated e-mail from RBI confirming the UIN.
For valuation of shares, it is pertinent to note that in case of partial of full investment in existing foreign company where investment is more than $ 5 million or case of investment by way of swap of shares, valuation is to be done by Category I Merchant Banker registered with SEBI or by an Investment Banker / Merchant Banker registered with the appropriate of host country and in all other cases, by a Chartered Accountant or Certified Public Accountant.
2. For ODI under Approval route:
The applicant should approach their designated Authorized Dealer (AD) with the proposal which shall be submitted to Reserve Bank after due scrutiny and with the specific recommendations of the designated AD bank along with supporting documents (as mentioned below) to the following address:
The Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Overseas Investment Division, Amar Building, 5th Floor, Sir P. M. Road, Fort, Mumbai 400001
For approval by Reserve Bank, following documents need to be submitted along with Section D and Section E of Form ODI – Part I by the designated Authorized Dealer:
a) A letter from the designated AD of the IP in a sealed cover mentioning the following details:
b) A letter from the IP addressed to the designated AD bank.
c) Board resolution for the proposed transaction/s.
d) Diagrammatic representation of the organisational structure indicating all the subsidiaries of the IP horizontally and vertically with their stake (direct & indirect) and status (whether operating company or SPV).
e) Incorporation certificate and the valuation certificate for the overseas entity (if applicable).
f) Other relevant documents properly numbered, indexed and flagged.
At the time of Investment:
Post Investment compliances:
A copy of audited financial statements of the overseas JV/WOS (on a standalone basis) is to be filed along with the APR.
Whereas Resident Individuals are required to file APR every year as per point 2 above. They are not required to file FLA.
Is it required to file APR in a host country where the law does not compulsorily require book auditing of accounts of JV/WOS?
The APR can be submitted by the Indian Party based on the un-audited annual accounts of the JV/WOS provided**:
(i) The Statutory Auditors of the Indian Party certify that law of the host country does not mandatorily require auditing of the books of accounts of JV/WOS and the figures in the APR are as per the un-audited accounts of the overseas JV/WOS; and
(ii) That the un-audited annual accounts of the JV/WOS have been adopted and ratified by the Board of the Indian Party.
(**The above exemption from filing the APR based on the unaudited balance sheet will not be available in respect of JV/WOS in a country/jurisdiction which is either under the observation of the Financial Action Task Force (FATF) or in respect of which enhanced due diligence is recommended by FATF or any other country/jurisdiction as prescribed by Reserve Bank of India.)