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 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, […]
In today’s globalized economy, US startups are increasingly looking beyond domestic borders to fulfill their operational needs. One of the key areas where outsourcing has become prevalent is accounting. Among the various destinations, India has emerged as a preferred choice for many US startups. This article explores the reasons why the Indian market is best […]
