In a recent and significant ruling, the Hon’ble Calcutta High Court in the case of Sanjay Jhunjhunwala vs. Reserve Bank of India & Ors. (WPA 2065 of 2025) has clarified a critical procedural point under the Foreign Exchange Management Act, 1999 (FEMA) — whether compounding of a contravention is permissible after the adjudication process is […]
This is a question that often comes up in cross-border structuring — and the short answer is: No, not under current FEMA rules. While the Companies Act, 2013 does not restrict zero-interest loans to subsidiaries, the Foreign Exchange Management Act (FEMA), 1999, backed by the Overseas Investment Rules, 2022, lays down stricter guidelines. 📌 As […]
With the increasing flow of foreign capital into Indian startups and private limited companies, understanding the regulatory nuances of FDI (Foreign Direct Investment) becomes essential. One area that often creates confusion is investment from NRE (Non-Resident External) accounts and the implications of Form FC-GPR under FEMA. Let’s break it down in simple terms. 💳 What […]
🌍 Introduction With Indian businesses going global, it’s now common for Indian entities to set up subsidiaries abroad. Often, these foreign subsidiaries further establish their own subsidiaries in other jurisdictions. This creates what is known as a Step-Down Subsidiary (SDS) structure. While such structures are legitimate for business expansion, they are subject to regulatory scrutiny […]
On 28th May 2024, the Reserve Bank of India (RBI) took a major step towards digital transformation in the regulatory space with the launch of the PRAVAAH Portal — Platform for Regulatory Application, Validation and Authorization Hub. This centralized web-based platform brings a much-needed overhaul to how regulatory approvals are sought and processed. From simplifying […]
The Beginning: An Exciting Opportunity Rohit Agarwal, a successful entrepreneur in India, had been eyeing an exciting investment opportunity. He wanted to acquire 40% equity shares in Investee Company Pvt. Ltd., a tech-based startup incorporated in India. However, these shares were currently held by UK-based Shareholder Ltd., which had invested in InnovaTech three years ago. […]
Expanding into India is an attractive opportunity for foreign companies due to its growing economy and business-friendly reforms. However, the process of company incorporation involves multiple regulatory steps, including compliance with the Digital Personal Data Protection Act, 2023 (DPDP Act), which introduces new obligations related to data protection. This guide outlines the standard procedure for […]
The Reserve Bank of India (RBI) categorizes investments in stocks and derivatives based on the nature of activity, determining regulatory compliance, reporting requirements, and eligibility for Overseas Direct Investment (ODI). 1. RBI Classification of Investment in Stocks & Derivatives A. Investing Activity (Non-Financial Activity) ✅ Definition: Investments made for long-term purposes, such as equity holdings, […]
When an Indian company receives foreign investment, it’s a big deal! But with great investment comes great responsibility—one of them being filing Form FCGPR (Foreign Currency-Gross Provisional Return). If you’ve ever wondered what it is, who needs to file it, and what happens if you miss the deadline, this article is for you! What is […]
of business structures, each with unique characteristics, requirements, and advantages. Choosing the right type of entity depends on your business goals, ownership structure, and capital investment. 1.1 Sole Proprietorship Definition: A business owned and managed by one individual. The owner is personally responsible for all liabilities and debts of the business. Ownership: 100% Filipino. Key […]
