Investment Outside India in Wholly owned Subsidiary

Others 1655 views 4 replies

Malav Shah

Company Secretary and AVP Legal

171 Points Joined June 2009

Hi Friends,

An Indian Company incorporated on 7 September 2009, wants to open a wholly owned subsidiary in US. As per RBI master circular on Investments outside India date 1/07/2009, an Indian Party can invest upto 400% of its Networth (as per last audited balance sheet) in WOS outside India. The business falls under Automatic Route.

My Query:

Indian party is newly incorporated, its first F.Y. is not yet completed. So it does not have a audited Balance Sheet. As per circular, the B/S has to be attached with the form for submission to RBI. Can I attach a Networth certificate from a CA to satisfy this requirement? or is there any other alternative?

Please provide views.

Regards

Malav

Replies (4)

Guest

No, It is not enough.

Prepare the quarterly audit report of the Company.

There will be no transaction for the first 2 month.

But auditor will scrutinise the September's transaction

Malav Shah

Company Secretary and AVP Legal

171 Points Joined June 2009

Thanks Ankur for reply.

You mean to say that, Audit should be carried out uptill a particular date say upto 30th September 2009 and a Balance Sheet and P& L A/c should be prepared duly audited and signed by Auditor and Director.

However this B/s will be only for 23 days (part of Financial year) and will not be filed with ROC or Income Tax.

Please clarify.

Malav