What is the Foreign Exchange Monetary Act (FEMA)?
The Foreign Exchange Management Act, 1999 (FEMA) is aimed at facilitating external trade and payments and promoting the orderly development and maintenance of foreign exchange market in India. The Central Government and RBI pass regulations/rules relating to foreign exchange under FEMA.
Who does FEMA apply to?
FEMA applies to the whole of India, citizens of India outside India and associate branches or subsidiaries, outside India, of companies or body corporates, registered or incorporated in India.
How does FEMA Impact your Firm?
FEMA impacts both inbound and outbound investments.
Under FEMA, Corporates in India are required to take necessary approvals from the Reserve Bank of India (RBI) for setting up a Joint Venture or a Wholly-owned Subsidiary (WoS) abroad. Approval from the RBI is also required for inviting foreign investment in India and for raising External Commercial Borrowings (ECBs) from Banks abroad. Similarly, foreign corporates are required to obtain approval from RBI for the opening of a Representative Office, Branch Office or Project Office in India.
How can CCL help?
We have extensive experience in advising Firms on the aspects relating to FEMA, including:
- External Commercial Borrowings (ECBs)
- Inward Remittance
- Overseas Remittance
- Opening of a Representative Office, Branch Office or Project Office in India by Foreign companies
Contact our team of experts in Mumbai for expert advice and support.