FEMA
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 January 2010
Recently I came to know that two foreign passport holder but Indian Origin came to India. One of them has opted for Transfer of Residency. Both of them have formed a partnership firm in India and now intend to do business in India.
Q.1 Can they form a firm in India to do business in India?
Q.2 Do they require to obtain any prior or post permission from RBI or any other regualtories to do business in India?
Q.3 Can they repatriate their capital and/or profit out of India at later stage?
Q.1 Can they form a firm in India to do business in India?
Q.2 Do they require to obtain any prior or post permission from RBI or any other regualtories to do business in India?
Q.3 Can they repatriate their capital and/or profit out of India at later stage?
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 January 2010
Urgent
24 July 2024
Certainly! Here are the responses to your queries regarding foreign passport holders of Indian origin forming a partnership firm in India under FEMA regulations:
### Q.1 Can they form a firm in India to do business in India?
Yes, foreign passport holders of Indian origin can form a partnership firm in India to conduct business. The Partnership Act, 1932 governs the formation and operation of partnerships in India. Foreign passport holders are eligible to form partnerships under Indian law, provided they comply with the regulations applicable to partnerships.
### Q.2 Do they require to obtain any prior or post permission from RBI or any other regulators to do business in India?
Yes, under FEMA (Foreign Exchange Management Act) regulations, foreign investment and business activities in India are regulated. Here are the key points:
- **Prior Permission for Certain Sectors:** Depending on the sector in which the partnership intends to operate, prior approval from the Reserve Bank of India (RBI) or the Government of India may be required. Certain sectors like defense, broadcasting, telecom, etc., have specific guidelines regarding foreign investment.
- **Automatic Route:** Some sectors allow for foreign investment under the automatic route, meaning no prior approval is required, but reporting requirements may apply.
- **Post-Investment Reporting:** Even if the investment is under the automatic route, the partnership firm would need to report the investment to the RBI through designated channels within a specified time frame.
### Q.3 Can they repatriate their capital and/or profit out of India at a later stage?
Yes, foreign passport holders of Indian origin can repatriate capital and profits under certain conditions:
- **Repatriation of Capital:** They can repatriate the capital investment made in India, subject to applicable taxes and regulatory requirements. Repatriation typically requires submission of necessary documents to an authorized dealer bank (like a bank authorized by RBI to deal in foreign exchange).
- **Repatriation of Profits:** Profits earned in India can be repatriated after payment of taxes, subject to certain conditions and compliance with FEMA regulations.
### Summary:
- **Formation of Firm:** They can form a partnership firm in India as per the Partnership Act, 1932.
- **Regulatory Compliance:** Depending on the sector of operation, they may need prior approval or can operate under the automatic route with post-investment reporting.
- **Repatriation:** They can repatriate capital and profits earned in India, subject to tax implications and FEMA regulations.
It's advisable for them to consult with a legal advisor or a chartered accountant familiar with FEMA regulations to ensure compliance and smooth operations in India.
### Q.1 Can they form a firm in India to do business in India?
Yes, foreign passport holders of Indian origin can form a partnership firm in India to conduct business. The Partnership Act, 1932 governs the formation and operation of partnerships in India. Foreign passport holders are eligible to form partnerships under Indian law, provided they comply with the regulations applicable to partnerships.
### Q.2 Do they require to obtain any prior or post permission from RBI or any other regulators to do business in India?
Yes, under FEMA (Foreign Exchange Management Act) regulations, foreign investment and business activities in India are regulated. Here are the key points:
- **Prior Permission for Certain Sectors:** Depending on the sector in which the partnership intends to operate, prior approval from the Reserve Bank of India (RBI) or the Government of India may be required. Certain sectors like defense, broadcasting, telecom, etc., have specific guidelines regarding foreign investment.
- **Automatic Route:** Some sectors allow for foreign investment under the automatic route, meaning no prior approval is required, but reporting requirements may apply.
- **Post-Investment Reporting:** Even if the investment is under the automatic route, the partnership firm would need to report the investment to the RBI through designated channels within a specified time frame.
### Q.3 Can they repatriate their capital and/or profit out of India at a later stage?
Yes, foreign passport holders of Indian origin can repatriate capital and profits under certain conditions:
- **Repatriation of Capital:** They can repatriate the capital investment made in India, subject to applicable taxes and regulatory requirements. Repatriation typically requires submission of necessary documents to an authorized dealer bank (like a bank authorized by RBI to deal in foreign exchange).
- **Repatriation of Profits:** Profits earned in India can be repatriated after payment of taxes, subject to certain conditions and compliance with FEMA regulations.
### Summary:
- **Formation of Firm:** They can form a partnership firm in India as per the Partnership Act, 1932.
- **Regulatory Compliance:** Depending on the sector of operation, they may need prior approval or can operate under the automatic route with post-investment reporting.
- **Repatriation:** They can repatriate capital and profits earned in India, subject to tax implications and FEMA regulations.
It's advisable for them to consult with a legal advisor or a chartered accountant familiar with FEMA regulations to ensure compliance and smooth operations in India.
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