Regulation 16A - Restructuring of the balance sheet of JV/WOS involving write-off of capital and receivables - Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004

1 [16A Restructuring of the balance sheet of JV/WOS involving write-off of capital and receivables (1) A listed Indian Party, who has set up WOS abroad or have at least 51 per cent stake in an overseas JV, may write off capital (equity / preference shares) and other receivables, such as loans, royalty, technical knowhow fees and management fees in respect of the JV / WOS up to 25 per cent of the equity investment in the JV / WOS subject to condition that the Indian Party should submit the following documents for scrutiny along with the applications to the designated AD Category-I bank: I. A certified copy of the balance sheet showing the loss in the overseas JV / WOS set up by the Indian Party; and II. Projections for next five years indicating benefit accruing to the Indian Party consequent to such write off / restructuring. (2) The write-off / restructuring allowed under sub-regulation (1) has to be reported to the Reserve Bank through the designated AD category I bank within 30 days of write-off / restructuring. (3) An unlisted Indian Party, who has set up WOS abroad or have at least 51 per cent stake in an overseas JV, is permitted to write off capital and other receivables up to 25 per cent of the equity investment in the JV /WOS under the Approval Route.] -------------------------- 1. Inserted vide Notification No. 277/2013-RB dated May 08, 2013, w.e.f.May 27, 2011