Whenever an Indian Entity receives funds from Foreign Nationals and Foreign entities or NRI’s (from their NRE Account), various RBI and FEMA Compliances have to be checked, analysed and complied to ensure proper approvals and reporting as per the existing laws.
For instance, when foreign funds are received in the form of Share Capital, then a two-stage reporting procedure is to be followed on receipt of funds as well as on Allotment of Shares.
When funds are received in the form of loan, then it would amount to "External Commercial Borrowings” (ECB) and both RBI regulations and FEMA guidelines will be applicable on the company. ECB’s refer to commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit and shareholder’s loans availed by an Indian borrower from non-resident lenders. There are various terms and conditions to be followed if ECB's are availed as per law.
VenturEasy experts provide all such RBI and FEMA Compliance advisory and services to ensure that you are fully compliant when entering into such transactions.VenturEasy experts provide all such RBI and FEMA Compliance advisory and services to ensure that you are fully compliant when entering into such transactions.