SWARUP SARKAR (PRACTISING CS) (59 Points)
07 May 2014Dear all,
One Indian Company needs to remitt funds to UAE as they have just opened a Pvt. Ltd. Company there at UAE at free trade zone. Both the companies have same management. what are the compliances required for FEMA Act? Should the Indian Company need RBI approval for the same?
CA. CS. Khushboo Dodhia Vora
(Practicing Charatered Accountant)
(125 Points)
Replied 08 May 2014
You need to comply with FEMA ODI guidelines. Firstly you need to check eligibility of company to set up a Subsidiary outside India. If it falls under automatic route, you need to fill FEMA relevant forms and submit the same to Banks to process the transfer of funds. Once the funds transfered you need to submit share certificate issued by the UAE company to the authorised dealier within 6 months.
If the conditions for investment through automatic route are not complied with, then prior RBI approval would be needed..
The entire trasnaction needs to be very meticously studied from FEMA perspective, failling to comply with even minor provisions would be construed as contravention..
CAclubindia
