Direct Investment by Residents in JV/WOS Abroad 1 Ashit Hegde

Indian Parties are not allowed to invest in a foreign entity engaged in real estate or banking. Automatic Route – Total financial commitment up to 100% of net worth as per last audited balance sheet is allowed. Ceiling not applicable for investment made out of EEFC balances and ADR and GDR proceeds. If investment is made out of ECB resources, limit is 400 % of net worth. Total financial commitment includes a) Equity b) CCPS c) Preference Shares d) Loans e) Corporate guarantees and Bank Guarantees. 2 Ashit Hegde

Specific RBI approval is a must for creating charge on immovable /movable property in favour of a non- resident entity. Capitalisation of exports and other dues permitted. Approval Route - Cases not falling within automatic route may be referred to RBI for approval. Portfolio Investments - Listed Indian companies may invest in equity and debt of listed overseas companies up to 50 percent of their (Indian Companies) net worth. 3 Ashit Hegde

Mutual Funds & VCFs - Are permitted to invest abroad with permission of SEBI. Proprietorship Concerns and unregistered firms - Will need prior approval of RBI. They need to be star export houses. Resident Individuals - Up to USD 75000/- per year under LRS. 4 Ashit Hegde

UIN (Unique Identification Number) - RBI will allot 13 digit UIN for each JV/WOS abroad. This number has to be quoted in all correspondence with Banks and RBI. 5 Ashit Hegde

Reporting – Form ODI Part I Section A -Details of Indian Party Section B -Details of Investment in New Project Section C -Details of Investment in Existing Project Section D -Funding for JVs/WOS Section E -Declaration by Indian Party Section F -Certificate by Statutory Auditors of the Indian Party 6 Ashit Hegde

Part II -Reporting of Remittances Part III-Annual Performance Report (APR) Part IV -Report on disinvestment/Voluntary Liquidation /Winding Up 7 Ashit Hegde

Reporting -- when and by whom - Part I -to be submitted by Indian Party to A.D.Bank at the time of first remittance Part II -To be signed by Bank Part I & II -Bank will submit these to RBI immediately after first remittance and obtain UIN Part III -APR certified by statutory auditors has to be submitted by party to Bank before 30 th June of every year. Bank has to submit this to RBI with its counter signature. 8 Ashit Hegde

Part IV -To be reported by Bank to RBI Evidence of investment - Indian party has to submit share certificates or any other documents to the Bank as evidence of Investment. 9 Ashit Hegde