ANNOUNCEMENT 05 Aug 2013In August 2013, the government of India announced changed rules for foreign investors.
NUMBER OF INTERVENTIONS
On 5 August 2013, the Reserve Bank of India (RBI) permitted resident individuals to make Overseas Direct Investments (ODI) in equity shares or compulsorily convertible preference shares of a Joint Venture (JV) or a Wholly Owned Subsidiary (WOS) outside India.
Some important conditions for such investments are presented below:
- Investments in JV's or WOS's engaged in real estate, banking or financial services activity are not permitted.
- The permitted ceiling at the time of investment is prescribed under the Liberalised Remittance Scheme (currently USD 75,000).
- The JV or WOS to be acquired or set up shall be an operating entity only.
- Disinvestment by the individual shall be allowed after one year from the date of making first remittance.
- The disinvestment proceeds shall be repatriated to India within 60 days from the date of disinvestment.
- No write-off shall be allowed in case of disinvestments.