08 August 2011
Can NRI become a partner in partnership firm in India and it is necessary that partnership will be registered and what is requirement for this purpose (any other law).
10 August 2011
Please refer to Master Circular no.2/2009-10 of RBI on foreign investment and accordingly: A Non-Resident India17(NRI) or a Person of Indian Origin18 (PIO) resident outside India can invest by way of contribution to the capital of a firm or a proprietary concern in India on non-repatriation basis provided;
i. Amount is invested by inward remittance or out of NRE / FCNR(B) / NRO account maintained with Authorised Dealers / Authorised banks.
ii. The firm or proprietary concern is not engaged in any agricultural / plantation or real estate business (i.e. dealing in land and immovable property with a view to earning profit or earning income there from) or print media sector.
iii. Amount invested shall not be eligible for repatriation outside India.
Investments with repatriation benefits NRIs / PIO may seek prior permission of Reserve Bank19 for investment in sole proprietorship concerns / partnership firms with repatriation benefits. The application will be decided in consultation with the Government of India.
Investment by non-residents other than NRIs / PIO
A person resident outside India other than NRIs / PIO may make an application and seek prior approval of Reserve Bank20, for making investment by way of contribution to the capital of a firm or a proprietorship concern or any association of persons in India. The application will be decided in consultation with the Government of India.
An NRI or PIO is not allowed to invest in a firm or proprietorship concern engaged in any agricultural/plantation activity or real estate business (i.e. dealing in land and immovable property with a view to earning profit or earning income therefrom) or engaged in Print Media.
10 August 2011
Thanks Ashutosh ji, can nri become partner in india unregistered firm and how he invest his money in partnership firm (unregistered). Any restriction from RBI or govt.
30 November 2012
1. CAN NRI BECOME PARTNER?, IF YES CAN HE TAKE BACE PROFIT EARNED FROM THIS PARTNERSHIP FIRM.
Yes NRI can become Partner subject to certain conditions under FEMA
2. CAN NRI DEPOSIT MONEY INTO PARTNERSHIP BUSINESS AS UNSECURED DEPOSIT? IF YES CAN HE TAKE BACK INTEREST EARNED ON THIS DEPOSIT AFTER DEDUCTING TDS?
Yes money can be brought in but subject to quite a few conditions under FEMA.
1.The maturity period of deposit shall not exceed 3 years. 2.Interest payable on deposits shall not exceed the ceiling rate prescribed from time to time under the Companies (Acceptance of Deposit) Rules, 1975. 3.The amount of deposit shall be received by debit to NRO account only, provided that the amount of the deposit shall not represent inward remittances or transfer of funds from NRE/FCNR(B) accounts into the NRO account.All the deposit accepting concerns may continue to hold and renew existing deposits held in their books in the name of NRIs on non-repatriation basis. The interest earned on such deposits, subject to Income Tax, will be eligible for repatriation. 4.The amount of deposits so collected shall not be utilized by the firm for (a) Re-lending (not applicable to a NBFC) or (b) for undertaking agricultural/plantation activities or (c) real estate business or (d) for investing in any other concern, firm or a company engaged in or proposing to engage in :- Agricultural/ plantation activities or Real estate business.
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