Outbound merger rules under FEMA govern foreign securities, Indian asset disposal, liability transfer, and rupee account use.

Outbound merger regulations under FEMA permit residents to acquire or hold securities of the resultant company under the foreign security rules, and permit resident individuals to acquire foreign securities within Liberalized Remittance Scheme limits. The resultant company may be treated as having a branch office in India, may assume sanctioned liabilities subject to FEMA restrictions and lender consent, may hold permitted Indian assets, and must sell impermissible assets or securities within two years with repatriation of proceeds. It may also open a Special Non-Resident Rupee Account for these transactions for up to two years.

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