Now all the Foreign Exchange transactions are regulated by the Foreign Exchange Management Act (FEMA) 1999 and the Rules and Regulations formed under the said Act. The Act applies to all branches, offices and agencies outside India, owned or controlled by a person resident in India.
FEMA emerged as an investor friendly legislation which is purely a civil legislation in the sense that its violation implies only payment of monetary penalties and fines. However, under it, a person will be liable to civil imprisonment only if he does not pay the prescribed fine within 90 days from the date of notice but that too happens after formalities of show cause notice and personal hearing.
Objectives of FEMA
(i) To facilitate external trade and payments; and (ii) To promote the orderly development and maintenance of foreign exchange market. The Act has assigned an important role to the Reserve Bank of India (RBI) in the administration of FEMA. The rules, regulations and norms pertaining to several sections of the Act are laid down by the Reserve Bank of India, in consultation with the Central Government. The Act requires the Central Government to appoint as many officers of the Central Government as Adjudicating Authorities for holding inquiries pertaining to contravention of the Act.
We provide the following Services pertaining to FEMA:
Inbound services in relation to
- Investments by Venture Capital Funds;
- Investments by multinational financial institutions;
- Investment in Joint Ventures / WOS / collaborations;
- Issue of shares by Indian companies to foreign persons.
Outbound services in relation to
- Investment in Joint Ventures and Wholly owned Services;
- Funds garnered from ADR/GDR issue;
- Investment in swap or exchange share arrangement;
- Capitalization of exports and other dues;
- Exports of goods towards equity;
- Acquisition of a foreign company;
- Investment by partnership / proprietary concern;
- Purchase / acquisition of foreign investment from Person Resident Outside India;
- Pledge of Shares.
Please feel free to contact us. We are Happy to assist you.