Foreigner in India Creating a Private Limited in India

Foreigner in India Creating a Private Limited in India

Foreigner in India Creating a Private Limited in India

Foreigner in India Creating a Private Limited in India | Setting up Pvt Ltd in India


Case study

Foreign National : Citizen of USA : say Mr Simon Philips
Suppose, Mr Simon is living in India, for a Job since 2010. In these 11 years , 2010 to 2021, he has accumulated a sum of Rs 50 lakhs in India, in his savings accounts and Fixed Deposits.
these are normal Indian Bank Accounts out of Normal Taxed Indian income

And now, in this case,

He is a “Resident” for Indian Income tax purposes

He is a “Resident” for Indian FEMA / RBI Purposes


RBI FEMA Master Circular says…..

Eligibility for Investing in India

A person resident outside India (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India, (other than an entity incorporated in Pakistan or Bangladesh) can invest in India, subject to the FDI Policy of the Government of India.
Erstwhile OCBs, who have converted themselves into companies incorporated outside India can make fresh investments in India under the FDI Scheme provided they are not under the adverse notice of RBI / SEBI.
Source :
https://www.rbi.org.in/scripts/BS_ViewMasterCirculars.aspx?Id=3630&Mode=0

In our case, this person Mr Simon is “not” a resident outside India, and he is “not” bringing money from outside India,

 

He is a “Resident” for FEMA purposes and Money is also already in India

So, this is not a Foreign Investment at all

Hence, FDI Rules and FEMA are not applicable in this case at all


Extracts from the Master Circular of the RBI for Foreign Investment in India

“Foreign Investment” in India is governed by the FDI policy announced by the Government of India and the provisions of the Foreign Exchange Management Act (FEMA) 1999. Reserve Bank of India has issued Notification No. FEMA 20/2000-RB dated May 3, 2000 which contains the Regulations in this regard. This notification has been amended from time to time.

Entry routes for investments in India

Foreign investment is freely permitted in almost all sectors. Foreign Direct Investments (FDI) can be made under two routes

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