Dear learned members,
Please give your view on reckoning Downstream Investment (DI) from the following scenario under FEMA NDI Rules, 2019.
A Ltd is a JV company having shareholding as follows:
B Ltd (Indian Company) : 50.07 %
C Ltd (Foreign Company): 49.93% treated as FDI under FEMA and complied with FEMA.
Now A Ltd has made investment in D Ltd (Indian Company) for 100% shares.
As it is clear that since A Ltd is having foreign investment less than 50% held by C Ltd, then D Ltd would not be considered as having any indirect foreign investment through A Ltd.
Now my query is B Ltd (Indian Company) is a 100% subsidiary of E Ltd (Foreign Company). Considering this scenario, whether investment by A Ltd in D Ltd will be considered as DI or not?
CAclubindia
