Overseas Direct Investment (ODI) Compliance (India only)
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      ODI Compliance

      What is ODI?

      ODI refers to an investment made by Indian residents or companies in overseas entities. This includes setting up joint ventures (JVs) or wholly-owned subsidiaries (WOS) abroad, as well as investing in foreign companies.

      Who is subject to ODI compliance guidelines?

      Typically ODI compliance guidelines are applicable to the following individuals and entities in India:

      1. Indian Residents: Any Indian citizen or resident who wishes to invest in foreign entities or acquire ownership in businesses outside India is subject to ODI compliance. This includes individuals making personal or business-related investments abroad.
      2. Indian Companies: Businesses incorporated in India looking to expand internationally through mergers, acquisitions, joint ventures, or wholly-owned subsidiaries outside India must comply with ODI guidelines.
      3. Partnership Firms and LLPs: Indian partnership firms and Limited Liability Partnerships (LLPs) that wish to invest in foreign companies or entities are required to follow the ODI regulations.
      4. Other Indian Entities: Trusts, societies, and other entities registered under Indian law that plan to make direct investments abroad must also adhere to the ODI framework.

      What are the typical compliance requirements under ODI?

      To stay compliant with ODI guidelines you will typically need to do the following:

      1. Filing Form FC: After beginning the formation process, submit Form FC along with supporting documents to the Authorized Dealer Bank for approval from the Reserve Bank of India (RBI).

      2. Obtaining a UIN: The Authorized Dealer Bank will secure a Unique Identification Number (UIN) from the RBI for the foreign entity.

      3. Reporting of Investment: After making an investment abroad, submit details of the share certificates received from the foreign entity to the Authorized Dealer Bank, which is then sent to the RBI.

      4. Annual Performance Report (APR): File an Annual Performance Report (APR) with the RBI each year, detailing the financial performance of the foreign entity against the UIN.

      5. Post-Investment Changes: Report any changes in shareholding, financial structure, or capital transactions to the RBI through the Authorized Dealer Bank.

      6. Approval for Further Transactions: Any further capital infusions, withdrawals, or loans between the foreign entity and the Indian investor should be routed through the Authorized Dealer Bank and reported to the RBI under the UIN.

      7. Comply with FEMA Guidelines: Ensure adherence to the Foreign Exchange Management Act (FEMA) regulations, including restrictions on certain sectors and limits on investment amounts.

      8. Timely Filing of Documents: Submit all necessary forms and documentation within the deadlines set by the RBI to avoid penalties or non-compliance issues.

      This is not a complete list of compliance requirements. doola can assist with U.S. compliance only. We recommend consulting local legal or financial advisors for your home country's regulations.