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OVERSEAS INVESTMENT RULES

23rd August, 2022

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In News

  • The Union Finance Ministry has released consolidated rules for overseas investment by Indian entities.
    • The main objective is to promote ease of doing business.
  • According to the new rules, the Foreign Exchange Management (Overseas Investment) Rules, 2022 will subsume the current regulations on Overseas Investments and Acquisition and Transfer of Immovable Property outside India Regulations, 2015.
  • The Ministry has highlighted that to promote businesses in India there is a need for Indian businesses to become a part of the global value chain.

Key Points of the released guidelines

  • The new rules have introduced Clarity in Overseas Direct Investment (ODI), Overseas Portfolio Investment and several other overseas investment-related commerce that were earlier under the approval route would now be under the automatic route.
  • The government in consultation with the Reserve Bank of India will take appropriate steps to simplify and implement the new rules.
  • New rules highlighted that investment by an Indian resident in the equity capital of a foreign entity would be classified as Overseas Direct Investment (ODI).
  • An Indian entity having an overseas office could acquire immovable property in foreign countries for the business and residential purposes of its staff.
  • Any resident of India whose account falls under the category of non-performing assets, or declared as a willful defaulter by any bank, or is under investigation by a financial service regulators would need to obtain a 'No Objection Certificate' from the lender bank or regulatory body or investigative agency before taking any financial obligation or undertaking disinvestment.

 

https://timesofindia.indiatimes.com/business/india-business/govt-issue-consolidated-overseas-investment-rules-to-promote-ease-of-doing-business/articleshow/93715264.cms

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