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Presently, an Indian Party requires prior permission of RBI to open, hold and maintain Foreign Currency Account in a foreign country for the purpose of overseas direct investments in that country. This Circular permits an Indian Party to open, hold and maintain Foreign Currency Account (FCA) abroad for the purpose of overseas direct investments without obtaining prior permission from RBI, provided:
(1) The Indian Party is eligible to undertake overseas direct investments.
(2) The host country Regulations require that investments into the country are to be routed through a designated account in that country.
(3) FCA is opened, held and maintained as per the regulations of the host country.
(4) Remittances sent to the FCA by the Indian party are utilised only for making overseas direct investment into the overseas JV/WOS.
(5) Any amount received in the account by way of dividend and/or other entitlements from the overseas JV/WOS are repatriated to India within 30 days from the date of credit.
(6) The Indian Party submits details of debits and credits in the FCA on yearly basis to the designated bank along with a certificate from the Statutory Auditors of the Indian party certifying that the FCA was maintained as per the host country laws and applicable FEMA regulations/provisions.
(7) FCA so opened must be closed immediately or within 30 days from the date of disinvestment from overseas JV/WOS or cessation thereof.
