Login / Register

FEMA Compliances

About This Plan

Foreign Exchange Management Act, 1999 (FEMA) is the legislation that governs foreign currency transactions in and out of India. The main aim of FEMA is to facilitate cross-border trade, the balance of payments, promote the orderly development of fair trade, and ensure effective compliance with relevant laws.


Mandatory compliances as per the FEMA, 1999:

Annual Return on Foreign Liabilities And Assets 


Every Indian Resident company that has made a Foreign Direct Investment (FDI) in the preceding year, including the current year, must submit the Foreign Liabilities and Assets (FLA) Return. If no such investment is made, then the company is not under any obligation to submit the FLA. Such a return must be submitted every year.


Annual Performance Report


Annual Performance Report is submitted by those Indian Party or Resident Individual who has made an Overseas Direct Investment (ODI). Annual Performance Report is provided in Form ODI Part II to the AD bank in respect of Joint Venture, Wholly Owned Subsidiaries (WOS) outside India on or before 31st December every year.


External Commercial Borrowing


Borrowers need to report to the RBI regarding all ECB transactions via an AD Category-I Bank in the form of ‘ECB 2 Return’ every month.


Single Master Form (W.E.F 30-06-2018)


  • Under the Single Master Form, the following forms are to be filled and submitted.
  • FC- GPR (Foreign Currency-Gross Provisional Return)
  • FC-TRS (Foreign Currency Transfer of Shares)
  • LLP-I (Limited Liability Partnership)
  • CN (Convertible Notes)
  • ESOP (Employee Stock Options Plan)
  • DI (Downstream Investment)
  • DRR (Depository Receipts)
  • InVi (Investment Vehicle that has issued its units to a person resident outside India)
  • The RBI has made efforts to integrate the existing reporting norms and set out a procedure for filing a single master form.


Advance Reporting Form


An Indian organization enjoying the benefit of receiving investment from abroad for the issue of shares or other qualified securities under the FDI Scheme needs to report the subtleties of the amount of consideration to the concerned Regional Office of the Reserve Bank via its AD category I bank within 30 days from the date of issue of offers.




The Indian company that receives foreign investment and allots shares against such investment should file such allotment with the RBI. The company must provide details of allotment in the Form FC- GPR (Foreign Currency – Gross Provisional Return) within 30 days of allotment to the RBI.




This form must be filed by the shareholder resident outside India or resident Indian when they transfer the shares of the Indian company from a resident to non-resident Indian or vice versa. The form FC- TRS (Foreign Currency Transfer) is submitted along with the Form FC- GPR to the authorized dealer bank, who in turn submits to the RBI.


Form ODI


Any Indian resident individual or Indian party who is willing to invest in the overseas market needs to submit Form ODI. At the point when they get a share certificate or some other documentary proof of investment in the outside JV/WOS as a proof of investment and present the equivalent to the assigned AD within 30 days.

How It's Done

SSI provides the following services regarding FEMA:


  • Inbound Investment under FDI, PIS, FII, NRI/PIO, FVCI

  • Transfer of shares from Indian residents to Non-India residents

  • Outbound Investment under Overseas Direct Investment

  • Overseas Company formations and Joint Venture structuring

  • Borrowing facilities under External Commercial Borrowings

  • Establishment and maintenance of Liaison Office, Branch office, project office

  • Obtaining FIPB approvals

  • FCRA registrations, Licenses

  • Compounding of offenses under FEMA

  • Conducting FEMA Audit

  • Consultancy and opinion on FEMA matters including current/capital account transactions

  • Adhoc compliances under FEMA Retainerships

  • Filing of Annual Asset & liability statement

  • Issue of Statutory Certificates under FEMA and RBI regulation

  • Making applications to Reserve Bank of India for purchase/sale of shares, Debentures & Securities and directly to and from Residents in India and outside India.

  • Compliance of the procedure including chartered Accountants Certification for repatriation of income/assets from India.

Information Guide

What are the limits prescribed for overseas Investments made by Indian residents?


Resident Individuals are permitted to freely invest in movable assets outside India. Presently Indian residents can make overseas investments for an amount up to US$ 250,000 per Financial Year. Such investment can be made for acquiring shares, bonds, and even placement of foreign exchange deposits. It may be noted that investments are not permitted for speculative transactions such as trading in foreign currencies, horse racing, betting, etc.


Investments can also be made in Joint Ventures / Wholly Owned Companies. Remittance is also permissible for current account transactions such as the education or medical expenses of any family member or friend and for making legitimate gifts to friends or relatives.


What are the limits prescribed for Overseas Direct Investments that can be made by an Indian Entity?

Indian Companies / LLPs / Registered Partnerships are permitted to freely invest in equity & debt outside India up to the limit prescribed under Foreign Exchange Regulations.


What are the norms for repatriation/ remittance of Non-Repatriable incomes and NRO balances as per FEMA, 1999?


Under the Foreign Exchange Management Act, 1999 [FEMA] NRI’s non-repatriable current income like rent, dividend, pension, interest on NRO deposits, etc. credited in the NRO account is now fully repatriable subject to payment/deduction of appropriate tax. Such facilities are also granted to NRIs who do not maintain an NRO account.


A Non-Resident Indian [NRI] as also a Person of Indian Origin [PIO] can also remit up to US$ 1 million per Financial Year out of balance held in the NRO account. Such balance in NRO accounts eligible for repatriation could have been sale proceeds of immovable property; assets acquired by way of Inheritance/legacy; an NRO deposit with a bank or a firm or a company; Provident Fund balance or superannuation benefits; the amount of claim or maturity proceeds of an insurance policy; sale proceeds of shares, securities; Balances held with Partnership or Proprietorship Firms, etc.


The remittance is allowed for any legitimate purpose or for the sheer reason of repatriation outside India.


What are the norms for returning NRIs as per FEMA, 1999?


Even after returning to India for permanent settlement, NRIs continue to enjoy many investment incentives under the Foreign Exchange Management Act,1999, and tax concessions under the Income-tax Act,1961.


FEMA treats returnee NRIs almost at par with NRIs as regards their foreign currency accounts in India and assets held abroad.


Under the Income Tax Act, 1961 also, "Not Ordinarily Resident", returnee NRIs continue to enjoy tax exemptions and tax concessions almost at par with NRIs for 2 to 3 years. They also enjoy the benefits of the Dual Tax Treaty, wherever applicable.


Who Regulates Compliance under FEMA?
The primary regulatory authority for Foreign Exchange in India is the Reserve Bank of India (RBI).
For tax treatment, the Income Tax Act will also apply to NRI Accounts/ Company Accounts.
Apart from the above regulations, the Companies Act 2013 would apply to transactions with companies.
Securities Law (SEBI) would be applicable to capital instruments.
Who are eligible to use services under FEMA?
The following are eligible to use services under FEMA:

1. Individuals.
2. High Net Worth Individuals.
3. Companies.
4. Partnerships/ proprietorship concerns.
5. Non-Resident Indians (NRIs).
6. Foreign Individuals.
7. Foreign Institutional Investors.
What is the difference between FERA and FEMA?
FERA is a demonstration which is ordered to manage payments and outside trade in India, is FERA. FEMA a demonstration started to encourage outside exchange and payments and to advance methodical administration of the forex showcase in the nation.
What is the difference between FERA and FEMA?
FERA is a demonstration which is ordered to manage payments and outside trade in India, is FERA. FEMA a demonstration started to encourage outside exchange and payments and to advance methodical administration of the forex showcase in the nation.
What are the applicable FEMA limits to transfer funds abroad?
Under the LSR plan of FEMA, a resident Indian, NRI, or remote national can send cash from India to outside nations up to 2,50,000 USD in one monetary year without looking for an endorsement from RBI or central government.

Other Essential Features And Guidelines Of FEMA Compliance Are As Follows:

FEMA will not apply to Indian citizens who live outside India. To check the residency of an Indian citizen, a method is adopted based on which number of days an individual lived in India is calculated during the preceding financial year (182 days or more to be a resident). An office, a branch, or an agency can be considered as a person to calculate Indian residency.

FEMA grants the authority to the central government to impose restrictions on three things and supervise those things as well.

These are payment given to any individual outside India, payment received from any individual outside India, forex, and foreign security deals.

It indicates the territories around the acquisition/holding of forex that requires the explicit consent of the Reserve Bank of India (RBI) or the government.

FEMA classifies foreign exchange transactions into two categories:

1. Capital Account
2. Current Account

The purpose of capital account transactions is to adjust the assets and liabilities either outside or inside India but of an individual who resides outside India. Thus, any transaction that has led to a change in overseas assets and liabilities for an Indian resident in a remote nation or vice versa falls under the category of capital account transaction. Any other sort of transaction falls into the category of the current account.

If any individual fails to comply with the norms, orders, and provisions of FEMA is liable for penalty. The penalty to be charged is up to thrice the sum involved in such contravention or up to Rs 2lakhs. Further penalty, which may reach out to rupees 5,000 for each day post the first day during which the contravention proceeds. Hence, it is wise of you to stick to all the compliances of FEMA.
What are the types of businesses that can be started by a foreign company in India?
A Foreign company can start the following businesses in India:

1. Branch Office (BO) - In a branch office, all forms of activities can be conducted.

2. Liaison Office (LO) - Commercial activities cannot be conducted in a Liaison office. The liaison office can represent the foreign office in India. Apart from this, the Liaison office can also promote the foreign office in India.

3. Project Office (LO) - The project office is established for executing a project in India.

Price available on request

Request A Quote