How the framework works
Most overseas investments by Indian companies go through the automatic route, handled by the AD bank. The Indian entity must not be on RBI's caution list or under investigation that bars it, the foreign entity must carry on a bona fide business activity, and the investment has to be priced at arm's length, supported by a valuation.
Once the investment is made, the Indian entity reports on it every year and reports any further investment, restructuring or disinvestment as it happens.
Documents required
- Board resolution approving the investment.
- Last audited balance sheet of the Indian entity, for the net worth limit.
- Details of the foreign entity — incorporation documents, shareholding and business.
- Valuation report for the acquisition price.
- For each year: the foreign entity's financial statements for the APR.
How we handle it
Check eligibility and limit
Net worth, the 400% limit, and any conditions for the sector or country.
Valuation
Arm's-length pricing, supported by a valuation certificate.
Form FC and UIN
Reported through the AD bank, with the UIN generated before the remittance.
Remit and report
Funds remitted and subsequent investments reported.
Annual Performance Report
Filed by 31 December each year, from the foreign entity's accounts.
Who can invest abroad, and how
| Investor | Route |
|---|---|
| Indian company or LLP | Overseas direct investment within the financial commitment limit |
| Resident individual | Within the Liberalised Remittance Scheme limit, subject to the conditions for individuals |
| Listed Indian company | Overseas portfolio investment within the limits for listed companies |
Practical notes from our engagements
- APR missed when the foreign entity is dormant. The annual report is due as long as the investment exists.
- Round-tripping structures. Investment that comes back into India through the foreign entity is restricted. We check structures before they're set up.
- Individuals using the LRS for business investment. Resident individuals have separate rules for overseas investment. We check which applies.
How we handle ODI compliance
We check eligibility and limits, arrange the valuation, handle the Form FC reporting through the bank, and file the Annual Performance Report each year.
Related services
Frequently asked questions
How much can an Indian company invest abroad?
Its total financial commitment can be up to 400% of its net worth as per its last audited balance sheet. Commitments above USD 1 billion in a year need prior RBI approval.
When is the Annual Performance Report due?
By 31 December every year, for each foreign entity.
Is RBI approval needed for overseas investment?
Most investments are under the automatic route through the AD bank. Approval is needed above the limits or in specified cases.
What if the APR is filed late?
A late submission fee applies under RBI's framework.
Can an LLP make overseas investment?
Yes, subject to the same framework and limits.
Can a resident individual set up a company abroad?
Yes, within the Liberalised Remittance Scheme limit and the conditions that apply to individuals under the 2022 framework.