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05 October 2022

Being A Resident Individual, CAN I INVEST OUTSIDE INDIA?

OUTSIDE_INDIA

Yes, a Resident Individual is eligible to make investment in the equity capital of listed as well as unlisted foreign entities by way of Overseas Direct Investment (ODI) as well as Overseas Portfolio Investment (OPI).

Let’s understand the term ODI and OPI.

Overseas Direct Investment (ODI) means an investment by way of acquisition of equity capital of a foreign company which is engaged in a bonafide business activity.

Overseas Portfolio Investment (OPI) means investment by way of acquisition of equity capital of a foreign listed company.

Can a Resident Individual invest in a Listed Foreign Entity?

Yes, Resident Individuals are eligible to invest in the equity capital of a listed and unlisted foreign entity. The investments made in the listed foreign entity shall have the following specification-

  • Investment of 10% or more (with or without control) of the paid-up equity capital of a listed foreign company, shall be treated as ODI.
  • Investment of less than 10% of the paid-up equity capital of a listed foreign entity, with control shall be treated as ODI
  • Investment of less than 10% of the paid-up equity capital, without any control, shall be treated as OPI

Amount of investment permitted for overseas investment Indian individuals?

Investment up to USD 2,50,000 is permitted under automatic route.

Can being an individual invest in a Start-up set-up abroad?

ODI in the start-ups recognised under the laws of host country. The said investment shall be done only from the owned funds.

Can investment in a financial sector foreign entity is also permitted?

Investment by way of inheritance, ESOP/ Sweat Equity or Minimum Qualification Shares can be done in a foreign entity which is engaged in a financial sector.

Want to invest in IFSC-GIFT City. Will the investment be treated as ODI?

Yes, the investment made in IFSC will be

Being a wilful defaulter, am I eligible to make investment outside India?

Yes, RBI has permitted individuals who are listed as wilful defaulter, or has account appearing as NPA or are under investigation by financial regulator/ CBI/ ED/ SFIO to invest outside India subject to submission of NOC.

Compliances to done for making investment outside India?

Investment made is subject to the compliances with the provisions related to investment route, investment limit, pricing guidelines, reporting requirements, obligations and many more as stated in the Liberalised Remittance Scheme as well as Overseas Investment Regulatory Framework comprising Rules, Regulations and Master Directions.

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  • Mr. Ankit Singhi

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    Mr. Ankit Singhi, holds a bachelor’s degree in Law, Commerce and Membership of the ICSI. He has to his credit 17 years of experience in providing advisory in Corporate Laws, Due Diligence, Acquisitions, IPO, Corporate Governance, Foreign Exchange laws and Setting up of Business, etc. He heads the Corporate Affairs & Compliances Team of the Group and plays a pivotal role in rendering value added services to a good number of big and medium listed and unlisted clients.

    Mr. Singhi possesses sound IT knowledge and has been instrumental in successfully conceptualizing and creating innovative websites for the Group, viz. www.llponline.in; www.startbizindia.in; www.femaindia.in; www.companiesact.in; and www.companywiki.in.

    Mr. Singhi has acted as guest speaker at various forums like ICSI, ICAI and IIC and authored many articles on corporate laws. He has done exhaustive research on the Companies Act, 2013 and conceptualized, designed and edited all the best-selling publications of the Group on Companies Act 2013, viz., “Insight into Companies Bill 2012” “Analysis of Companies Act, 2013” “Companies Act, 2013 and Rules & Forms”, “Companies Act, 2013 (a book in 2 volumes)”and “Companies Act, 2013.

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