Overseas Investment by Person Resident in India(PRII) [Section 6(4)]

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....sis of [Section 6(4)]  • In general terms of this general permission, a  person resident in India is allowed to - • hold; • own; • transfer; • invest in; • foreign currency [defined in section 2(m)] • foreign security [defined in section 2(o)] • immovable property • If such currency, security or property was acquired, held or owned by such person • when he was resident outside India or inherited from a person who was resident outside India. • Reserve Bank has clarified that the following transaction are covered under section 6(4) of FEMA Act,1999 [A.P. (DI....

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....o has acquired and continues to hold equity capital of any foreign entity in accordance with the provisions of the Act or the rules or regulations made thereunder- • May invest in the equity capital issued by such entity as a rights issue; or                    • may be granted bonus shares subject to the terms and conditions under these rules. • The person resident in India acquiring the rights issue may renounce to in favour of a person resident in India (PRII) or a person resident outside India (PROI). [ Rule 7 ] • As per para 7 Rights issue and bonus shares  • A person resident in India, who h....

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....¢ "bonafide business activity" shall mean any business activity permissible under any law in force in India and the host country or host jurisdiction, as the case may be.  • Structure of subsidiary Foreign Entity • the structure of such subsidiary or step down subsidiary of the foreign entity shall comply with the structural requirements of a foreign entity. • Prior approval from Central Government • Overseas Investment or transfer of such investment including swap of securities in a foreign entity formed, registered or incorporated in Pakistan or in any other jurisdiction as may be advised by the Central Government from time to time shall require prior approval of the Central G....

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.... The Reserve Bank, if it considers necessary may, in consultation with the Central Government,- • Stipulate the ceiling for the aggregate outflows during a financial year on account of financial commitment or Overseas Portfolio Investment; • Stipulate the ceiling beyond which the amount of financial commitment by a person resident in India in a financial year shall require its prior approval. Non-applicability of rules and regulations relating thereto in certain cases [ Rule 4 of Foreign Exchange Management (Overseas Investment) Rules, 2022 Read with Para 2 Foreign Exchange Management (Overseas Investment) Directions, 2022 ] Exemptions from applicability of OI Rules/Regulations/Directions [ Para 2 ] ....

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.... non-performing asset; or • is classified as a willful defaulter by any bank; or • is under investigation by a financial service regulator or by investigative agencies in India, namely, the Central Bureau of Investigation or Directorate of Enforcement or Serious Frauds Investigation Office, shall, before making any financial commitment or undertaking disinvestment under these rules or the Foreign Exchange Management (Overseas Investment) Regulations, 2022, obtain a No Objection Certificate from the lender bank or regulatory body or investigative agency by making an application in writing to such bank or regulatory body or investigative agency concerned • Fails to issue no objection certif....