Foreign investment into India, investment abroad, and cross-border business payments.
A US company paying an Indian consultant, a family office in Singapore investing in an Indian start-up, a resident Indian setting up a subsidiary in the UAE: each transaction crosses a border, and each engages more than one body of law.
When investment or business crosses India’s border, more than one body of law applies. FEMA (and, where relevant, sector or securities regulation) decides whether the transaction is permitted and how it is reported, and income-tax law decides how it is taxed. Company law may add requirements of its own. Meeting one set of rules does not satisfy the others.
The same distinction runs through investment abroad by Indian residents. Sending money abroad under the Liberalised Remittance Scheme and making an overseas direct or portfolio investment are governed by related but distinct rules, and an individual’s overseas investment can engage both.
Where to begin
- Investing in an Indian company from abroad
- Selling or transferring shares of an Indian private company
- LRS, ODI and OPI compared
- Paying non-residents for services or royalties
Where another country is involved, its tax, legal and reporting position should be reviewed by an appropriately qualified professional in that country.
All guides in this section
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How Can an NRI Sell or Transfer Shares of an Indian Private Company?
An NRI share exit depends on the original FEMA holding basis, the recipient, company-law requirements, valuation, tax withholding and whether the proceeds can legally be remitted.
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LRS, ODI and OPI: Which Rules Apply When Indian Residents Invest Overseas?
LRS governs a resident individual’s remittance. ODI and OPI classify the overseas investment and determine different compliance requirements.
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Paying Non-Residents for Services or Royalties: What Must Indian Businesses Check?
Before paying an overseas consultant or licensor, identify what was purchased, whether India can tax the sum, whether a treaty applies and which deduction and remittance records are required.
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How can NRIs, OCIs and foreign investors invest in an Indian company?
Investing in an Indian company involves more than sending money. The investor’s FEMA classification, sector, investment route and repatriation rights determine the applicable rules.