About Clasis Law

Clasis Law is one of the leading full-service Indian law firms which provide speedy services while upholding the law and following every regulation in the book. The firm is recognized as highly professional and process-driven, with the necessary systems and infrastructure to provide hassle-free services to clients. It has an established capability and operational ability to advise clients across borders through its vibrant network of international law firms located around the globe, including in some of the most difficult jurisdictions in the world. The firm's clients range from Fortune 500 companies to SMEs and small businesses. In addition, it provides specialized services to international SMEs that choose India as their preferred investment destination.

Foreign Exchange Management (Overseas Investment) Directions, 2022

The Reserve Bank of India (RBI) on 22 August, 2022 has issued a Notification on the Foreign Exchange Management (Overseas Investment) Directions, 2022.

In this direction, a significant step has been taken with operationalisation of a new Overseas Investment regime. The new regime simplifies the existing framework for overseas investment by persons resident in India to cover wider economic activity and significantly reduce the need for seeking specific approvals. This will reduce the compliance burden and associated compliance costs.

Some of the significant changes brought about through the new rules and regulations are:

(i)  Enhanced clarity with respect to various definitions;

(ii)  Introduction of the concept of “strategic sector”;

(iii)  Dispensing with the requirement of approval for: a. deferred payment of consideration; b. investment/disinvestment by persons resident in India under investigation by any investigative agency/regulatory body; c. issuance of corporate guarantees to or on behalf of second or subsequent level step down subsidiary (SDS); d. write-off on account of disinvestment;

(iv) Introduction of “Late Submission Fee (LSF)” for reporting delays.

The detailed operational instructions in this regard are given in Annex-I of this Notification. The instructions contained in these directions shall supersede the instructions contained in the circulars listed in Annex-II of this Notification.

The revised reporting forms and instructions for filling up the forms under the new regime are being provided on Reserve Bank’s website in Part VIII of the Master Direction no. 18 on ‘Reporting under Foreign Exchange Management Act, 1999’ dated January 01, 2016.

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