FEMA is a regulatory mechanism that enables the Reserve Bank of India to pass regulations and the Central Government to pass rules relating to foreign exchange in tune with the Foreign Trade policy of India.
FEMA served to make transactions for external trade and easier – transactions involving current accounts for external trade no longer required RBI’s permission. The deals in Foreign Exchange were to be ‘managed’ instead of ‘regulated’
The main Features of FEMA regulations are:
- Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted. It is FEMA that gives the central government the power to impose the restrictions.
- Free transactions on the current account are subject to reasonable restrictions that may be imposed.
- Without the general or specific permission of FEMA, MA restricts the transactions involving a foreign exchange or foreign security and payments from outside the country to India – the transactions should be made only through an authorized person.
- Deals in foreign exchange under the current account by an authorized person can be restricted by the Central Government, based on public interest generally.
- Although selling or drawing of foreign exchange is done through an authorized person, the RBI is empowered by this Act to subject the capital account transactions to a number of restrictions.
- Residents of India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold immovable property abroad if the currency, security or property was owned or acquired when he/she was living outside India, or when it was inherited by him/her from someone living outside India.
Generally, FEMA and RBI regulations are quite complex to understand and implement and any noncompliance with exchange control regulations lead to a huge penalty. Therefore, it is very important to take the advice of professional and expert firm’s dealing with such matters on regular basis.
In this regard, we provide our services relating to FEMA and RBI regulations as under:
- FEMA regulations interpretation, advisory and compliance
- RBI regulations interpretation, advisory and compliance
- Advisory relating to registration and closure of Branch Office, wholly-owned subsidiary company, Liaison office, project office and Joint Ventures in India from FEMA and RBI regulations.
- Assistance in obtaining approval from the Department of Industrial Policy & Promotion, Foreign Investment Facilitation Portal
- Advising on Foreign Direct Investment, External Commercial Borrowings under Foreign Exchange Regulations
- Assistance in preparation and filing of returns/forms/information/documents with RB like FCGPR, FCTRS, FLA etc
- Advisory and compliance relating to Overseas Direct Investment (ODI)
- Assistance in obtaining RBI approval for making payment against restricted current account transactions
- Advisory services under Foreign Investment Policy, telecom laws, land-related laws, etc.
- Assistance in obtaining other regulatory approvals, licenses, clarifications/dispensations