Sr. No.

Compliance

Particulars

1

Determine ODI Applicability

Identify whether the proposed investment is ODI, including investment in unlisted equity, 10% or more in a listed foreign entity, or investment with control in a listed foreign entity below 10%.

2

Identify Foreign Entity

Obtain Certificate of Incorporation, constitutional documents, registered office details, business activity, directors and shareholding/UBO details of the foreign entity.

3

Check Permitted Activity

Verify that the foreign entity is engaged in a permitted bona fide business activity and is not engaged in prohibited activities.

4

Check Indian Investor Eligibility

Verify incorporation documents, PAN, MOA/AOA, directors' details, shareholding pattern, UBO and latest audited financial statements of the Indian entity.

5

Check Financial Commitment Limit

Calculate total existing and proposed financial commitment and verify compliance with the applicable limit based on the Indian entity's net worth. Maintain latest audited financial statements and net-worth calculation. (Ensure the total financial commitment (equity, loans, guarantees) does not exceed 400% of the Indian entity's net worth based on the last audited balance sheet.)

6

Check Existing Defaults

Check whether the Indian entity is an NPA/wilful defaulter or under investigation. Where applicable, obtain NOC from the lender/regulator/investigating agency before investment.

7

Check Overseas Structure

Review the proposed foreign subsidiary/step-down subsidiary structure and ensure compliance with applicable FEMA requirements relating to subsidiary layers and round-tripping.

8

Board Approval

Obtain Board Resolution approving the overseas investment, amount, foreign entity, mode of investment and authorised signatory.

9

Investment Agreement

Execute and retain Share Subscription Agreement, Share Purchase Agreement, JV Agreement, Shareholders Agreement or other transaction documents, as applicable.

10

Valuation

Obtain valuation report/certificate and valuation workings wherever required, particularly for acquisition/transfer of shares or other applicable transactions.

11

Source of Funds

Document source of investment funds through bank statements, financial statements, loan documents or other supporting evidence, as applicable.

12

Determine Investment Route

Establish whether the transaction is under the Automatic Route or requires RBI/Central Government approval based on the nature, amount, jurisdiction and circumstances of the investment.

13

Approval, if Applicable

Where approval is required, prepare application through the designated AD bank along with Board Resolution, project/investment proposal, financial statements, valuation and other supporting documents.

14

Select AD Category-I Bank

Appoint/designate an Authorised Dealer Category-I bank/branch for handling the ODI transaction and reporting.

15

Form FC Filing

Complete Form FC with details of the Indian entity, foreign entity, investment, financial commitment, funding source and transaction. Submit it with supporting documents to the designated AD bank. R Reserve Bank of India

16

Obtain UIN

Ensure the AD bank obtains the RBI Unique Identification Number (UIN) for the foreign entity before outward remittance/acquisition, as applicable. Maintain UIN correspondence and records. L Lexplosion Solutions

17

Make Investment / Remittance

Make the investment through permitted mode and banking channels. Maintain bank advice, SWIFT/remittance confirmation, debit statement and transaction documents.

18

Evidence of Investment

Obtain and submit evidence of investment such as share certificate, share allotment letter, register of members/cap table or other ownership evidence to the AD bank within the prescribed period. L Lexplosion Solutions

19

Loan to Foreign Entity

If funding is through debt, maintain loan agreement, Board approval, interest/repayment terms, disbursement proof and outstanding loan statement.

20

Guarantee / Other Financial Commitment

For guarantees/security or other financial commitment, maintain guarantee agreement, underlying facility agreement, Board approval, amount calculation and AD bank reporting.

21

Additional Investment

Before each additional equity/loan/guarantee/financial commitment, reassess eligibility, financial commitment limits and obtain necessary approvals and supporting documents.

22

Change in Shareholding / Restructuring

Maintain revised cap table, share transfer/allotment documents, valuation report where applicable, Board/foreign entity approvals and required Form FC reporting.

23

Annual Performance Report (APR)

Prepare APR for each applicable foreign entity based on the foreign entity's financial statements and other required information. RBI's APR format specifically requires information based on the foreign entity's audited financial statements. R Reserve Bank of India

24

APR Supporting Documents

Maintain foreign entity audited financial statements, auditor's report, shareholding details, financial performance, investment details and UIN-wise reconciliation supporting the APR.

25

APR Filing

File APR through the designated AD bank within the prescribed timeline and retain acknowledgement/copy of filing.

26

FLA Return

Where applicable, prepare and file the annual Foreign Liabilities and Assets (FLA) Return with RBI and retain FLAIR acknowledgement and supporting financial information.

27

Dividend / Other Receivables

Maintain dividend declaration, dividend voucher, foreign bank statement, tax deduction/withholding certificate and evidence of receipt/repatriation of applicable amounts.

28

Inter-company Transactions

Maintain agreements, invoices, debit/credit notes, payment records, transfer-pricing/arm's-length support and valuation documents wherever applicable for transactions with the foreign entity.

29

Repatriation Monitoring

Maintain a tracker for dividends, sale proceeds, receivables and other amounts due from the foreign entity and evidence of repatriation where required.

30

Disinvestment / Sale

Obtain Board approval, sale/share transfer agreement, valuation documents where applicable, purchaser KYC, consideration details and foreign regulatory approvals, if applicable.

31

Disinvestment Reporting

Report the disinvestment through the designated AD bank and maintain Form FC/other applicable reporting, sale documents and transaction acknowledgement.

32

Receipt of Sale Proceeds

Maintain foreign bank statement, SWIFT/remittance advice and Indian bank statement evidencing receipt/repatriation of sale proceeds.

33

Annual Reconciliation

Reconcile UIN-wise equity investment, loans, guarantees, financial commitment, shareholding, APR, FLA and books of account every year.

34

FEMA Default Review

Review missed/delayed Form FC, APR, FLA, evidence of investment, additional investment and other reporting requirements.

35

LSF / Regularisation

For delayed reporting, determine whether Late Submission Fee is available and maintain LSF calculation, payment proof and regularisation documents. RBI has prescribed LSF mechanisms for delayed ODI reporting. E EY

36

Compounding, if Required

Where the contravention cannot be regularised through LSF, evaluate FEMA compounding/approval requirements and maintain application, explanation, supporting documents and order.

37

Maintain ODI Master File

Maintain a complete UIN-wise file containing Indian/foreign KYC, Board approvals, agreements, valuation, Form FC, UIN, remittances, investment evidence, APR, FLA, additional investments, restructuring/disinvestment and AD bank correspondence.