FEMA and RBI Compliance in India

Expert Advisors for cross-border investments and foreign exchange regulation.

Setting up cross-border business operations is an exhilarating experience, whether you are an international entrepreneur looking at India or an Indian entrepreneur looking at the world. The dynamic and mature regulatory framework in India, governed mainly under the Foreign Exchange Management Act (FEMA) and regulations of the Reserve Bank of India (RBI), needs both homegrown expertise as well as an experienced compliance partner.

With liberalization in 1999, FEMA substituted the old FERA regime, marking India's journey toward an open, investor-oriented economy. The FEMA oversees every foreign exchange transaction in India, including investments, external trade, outward and inward remittances, overseas expansion, and others. The RBI, as the central bank of India, serves as the major regulatory body, providing directions, circulars, and approvals about foreign exchange operations.

Purpose of FEMA:

• Enable payments and external trade
• Ensuring smooth operations of India's foreign exchange market
• Avoid current account deficits without blocking legitimate payments

FEMA applies equally to all Indian residents, parties, offices, branches, agencies, as well as non-residents dealing with Indian funds or assets.

1. Foreign Direct Investment (FDI) Advisory & Compliance

Indian FDI policies are sector-specific with continuous changes and developments. We assist clients in:

• Selecting the optimal investment route (automatic route or government route)
• Preparing & filing requisite disclosures (Form FC-GPR, FC-TRS, Annual Return on Foreign Liabilities and Assets)
• Structuring the investments to optimize taxes and achieve regulatory efficiency
• Liaising with RBI and Ministry of Finance as needed

2. Overseas Direct Investment (ODI) & Global Expansion

For Indian firms looking to make foreign investments, ODI is governed under the FEMA (Transfer or Issue of Any Foreign Security) Regulations. We provide:

• Advisory services regarding permissible modes & limits of overseas investment
• Assisting in transaction structuring, documentation, and RBI reporting (Form ODI)
• Compliance with all statutory filing requirements

3. Cross-Border Receivables & Remittances

Efficient and compliant movement of funds is central to global business. Foros Advisors LLP supports clients with:

• Documentation, certification, and advisory services for outward and inward remittances (including current and capital account transactions)
• Assessment of tax liability and certification (Form 15CA/CB)
• Assistance in repatriation of funds, including dividends, royalties, fees for technical services, and sale proceeds from capital assets

4. External Commercial Borrowings (ECB)

Access to overseas funding opportunities can provide advantages, but it's strictly governed. We provide:

• Eligibility, admissible end-uses, minimum maturity, and norms for hedging in respect of ECB.
• ECB reporting and regular RBI compliance (ECB-2 Return)
• Lender negotiation assistance and regulatory clearances

5. Joint Venture Structures and Wholly Owned Subsidiaries

It produces opportunity and complexity around the world. Our services include:

• Legal vetting of shareholders' agreements, joint venture agreements, and financing arrangements
• Regulatory due diligence for both inbound and outbound ventures
• Advisory services on entry, exit, and repatriation of profits

6. Compounding & Regularization of Offences

If inadvertent non-compliance occurs, quick rectification is imperative. We help with:

• Filing cases before the RBI for compounding of offenses
• Preparing submissions, presenting, and following up until finalisation
• Advisory on mitigating and preventing future contraventions

7. Regular Reporting & Regulatory Filings

We maintain strict vigilance, keeping your global enterprises fully compliant. We offer:

• Annual return filings
• Filing of statutory returns (annual & event-based)
• Audit support, responses to RBI/FEMA notices, and submission of clarifications
• Maintaining electronic and necessary physical records in place for future audits