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TMI BlogIndian Direct Investment in JVs/WOSs AbroadX X X X Extracts X X X X X X X X Extracts X X X X ..... .49/2002-RB dated January 19, 2002 FEMA.53/2002-RB dated March 1, 2002 FEMA.55/2002-RB dated March 5, 2002 2. With a view to simplifying and liberalising the present policy of overseas direct investment, the existing guidelines have been modified as under : 2.1 Investment by Firms in India It has been decided to permit firms in India registered under the Indian Partnership Act, 1932 and having a good track record, to make direct investments outside India in an entity engaged in any bonafide business activity under the Automatic Route upto 100% of its net worth or USD 10 mn. or its equivalent, whichever is less, in one financial year. Firms intending to undertake financial services activities would, however, have to satisfy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment by way of swap of shares require prior approval of the Reserve Bank. It has now been decided to permit such investments also under the Auto Route as per the conditions specified in Regulation 6 of Notification No. FEMA.19/RB-2000 dated May 3, 2000 as amended. However, Authorised Dealers may note that all share swap transactions require prior approval of the Foreign Investment Promotion Board (FIPB) for the inward leg of investment. Such swap transactions would have to be in accordance with the valuation norms prescribed vide Sub-Regulation 7(b) of Regulation 6 of Notification ibid, i.e., by a Category I Merchant Banker registered with the Securities and Exchange Board of India (SEBI) or an Investment Banker/Merchant Banker outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional norms prescribed in Regulation 7 of Notification No. FEMA.19/RB-2000 dated May 3, 2000 as amended are permitted to invest abroad in the financial sector. In partial modification of the said Regulation, the stipulation of the minimum net worth of Rs.15 crores prescribed therein has been dispensed with. However, henceforth any Indian entity engaged in the financial services sector and wishing to undertake financial sector activities abroad should also obtain approval for doing so from the concerned Regulatory Authorities both in India and abroad before venturing into such activity. All other conditions stipulated in the Regulation 7 remain unchanged. While forwarding the report of remittance in respect of the above category in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be forwarded annually to the Reserve Bank. 4. Transfer by way of sale of shares of a JV/WOS outside India Hitherto, in terms of Regulation 16 of Notification No. FEMA.19/RB-2000 dated May 3, 2000 as amended, prior permission of Reserve Bank was required for transfer by way of sale of shares of a JV/WOS. It has now been decided to permit Indian party to transfer by way of sale to another Indian party, which complies with the provisions of Regulation 6 of the said Notification or to a person resident outside India, any share or security held by it in a joint venture or wholly owned subsidiary outside India subject to the conditions and reporting requirements indicated in the Annexure to this circular. An Indian party, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/or export proceeds from the joint venture or wholly owned subsidiary ; iv. The overseas concern has been in operation for at least one full year and the annual performance report together with the audited accounts for that year has been submitted to the Reserve Bank; v. The Indian party is not under investigation by CBI/ED/ SEBI/IRDA or any other regulatory authority in India; Sale proceeds of shares/securities shall be repatriated to India immediately on receipt thereof and in any case not later than 90 days from the date of sale of the shares/securities. II. Authorised Dealers may obtain following documents in order to process an application for disinvestment from an Indian party having JV/ WOS abroad. i. Latest Annual Perf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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