FOREIGN INVESTMENT IN INDIA (FDI)


India is one of the fastest growing economies, and is considered a bright spot on world economic map. According to the statistics, India attracted $43 billion as foreign direct investment in FY17, which is up 9% over the previous year. There are basically two routes for FDI inflows, one is the approval route where prior approval from government is mandatory before investment in some sectors, the second is automatic route where no prior approval before investment is needed in some sectors however, post investment compliances need to be done. It is estimated that more than 91% of FDI inflows are through automatic route. The Government’s thrust on ease of doing business, especially on easing processes for FDI saw its announcement to remove one more layer in decision making for the inflow of FDI whereby dismantling of Foreign Investment Promotion Board (FIPB) has been approved by the cabinet recently. Resultantly, FDI proposals now will be cleared directly by the ministries and departments concerned with sectors where the FDI is allowed under ‘approval’ route. It is pertinent to note here that there are only 11 sectors now which need prior approvals for FDI, the rest have been put under automatic route. However, the entry process, whether under approval route or automatic route, is a little bit complicated. We assist investors with strategies for entry and make their experience simpler and easier as an investor. We also assist in all the stages of funding cycle including seed capital, first round and down round funding. We act for private equity houses, venture capitalists, founders and management. Our services include:

 

  • Advising on investment regulations, sectoral caps and regulatory issues relating to various sectors in India.
  • Advice on regulatory framework in India regarding the transactional work including Companies Act, Limited Liability Company (LLP), Foreign Direct Investment (FDI), Reserve Bank of India (RBI), Foreign Exchange Management Act (FEMA) and Foreign Trade Policy (FTP).
  • Drafting and review of Term Sheets, Share Purchase Agreements, Share Holders Agreements, and other necessary legal documents / agreements.
  • Taking necessary approvals from the concerned Department, Ministries and RBI as applicable on case to case basis.
  • Handling of post investment (automatic route) regulatory compliances.
  • Compounding proceedings before RBI for violations of FEMA.
  • Incorporation of company / wholly owned subsidiary company, LLP etc.
  • Setting up of Liaison Office, Branch or Project Office for the foreign company.

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