Notification  No. FEMA.180/RB-2008

dated September 5, 2008

Foreign Exchange Management (Transfer or Issue of Any
Foreign Security) (Amendment) Regulations, 2008

(iii) in sub-regulation (5), in the proviso, for clause (b), the following shall be substituted, namely:-

3. Amendment of Regulation 9:-

In the principal Regulations, in Regulation 9, in sub-regulation (2),   the following shall be substituted, namely:- 
“(2) Application for direct investment in Joint Venture/Wholly Owned Subsidiary outside India, or by way of exchange for shares of a foreign company, shall be made in Part I of the Form ODI.”

4. Amendment of Regulation 14:-

In  the  principal  Regulations, in  Regulation 14,  in sub-regulation (2), for clause (ii) of the following shall be substituted, namely:-

“(ii) The Indian Party shall submit through the designated authorised dealer concerned a report to the Reserve Bank in Parts I and II of the Form ODI  within 30 days of effecting the final remittance.”

5.  Amendment of Regulation 15:-

In the principal Regulations, in Regulation 15, for clause (iii) the following shall be substituted,  namely:-    

“(iii) submit to the Reserve Bank through the Authorised Dealer every year within 60 days from the date of expiry of the statutory period as specified by  the respective laws of the host country  for  finalization of the audited accounts of the Joint Venture/Wholly Owned Subsidiary outside India or such further period as may be allowed by Reserve Bank, an Annual Performance Report in Form ODI Part III in respect of each Joint Venture or Wholly Owned Subsidiary outside India set up or acquired by the Indian Party and other reports or documents as may be specified by the Reserve Bank from time to time.”

6. Substitution of Regulation 19:-

In the principal Regulations, for Regulation 19, the following shall be substituted, namely:-

“19. Prior permission of the Reserve Bank for a Proprietary Concern in India to accept shares

A proprietary concern in India may apply to the Reserve Bank through the authorised dealer in Part I of the Form ODI for permission to accept shares of a company outside India in lieu of fees due to it for professional services rendered to the said company.

Provided that:-

(a) the value of the shares accepted from each  company outside India shall not exceed fifty per cent of the fees receivable by the Indian concern from that company; and,

(b)  the Indian concern’s shareholding in any one company outside India by virtue of shares accepted as aforesaid shall not exceed ten per cent of the paid-up capital of the company outside India, whose shares are accepted.

7. Substitution of Form

In the principal regulations, after Schedule II, at the end, for the Forms annexed, Form ODI annexed to these regulations shall be substituted.