MANDATORY COMPLIANCES UNDER FOREIGN EXCHANGE MANAGEMENT ACT (FEMA)
Before knowing about the mandatory compliances to be done under FEMA act, it is important to know as why is it necessary to do all reporting. Like all the Indian companies are governed under Companies Act 2013, the government has made separate law to govern all inward and outward foreign transactions i.e Foreign Exchange Management Act which itself is self explanatory to manage foreign exchanges in India. Whenever foreigners invest in India or Indians invest outside India, they have to comply with FEMA regulations.
There are separate compliances for the purpose of Inward and outward remittance. Let’s discuss what are the compliances when there is foreign inward remittance. Now comes the first Question: who is liable to invest in India?
Persons resident outside India shall not invest in India unless investment made are in accordance with Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 or permitted by Reserve Bank of India if considered necessary.