Foreign Direct Investment and FEMA Lawyers India

Foreign Direct Investment and FEMA

Indian foreign investment and foreign exchange advice for overseas investors, Indian companies, founders and corporate groups.

Foreign investment into and from India is governed by the Foreign Exchange Management Act, the rules and regulations issued under it, the Indian foreign investment policy, sector-specific regulation and reporting requirements administered through the Reserve Bank of India and authorised dealer banks.

A corporate transaction may be commercially agreed but still require adjustment to comply with foreign ownership limits, approval conditions, permitted instruments, pricing rules, deferred consideration requirements, reporting timelines or restrictions applicable to the sector or the parties.

Foreign investment into India

Entry route and sector analysis: Reviewing whether the investment falls under the automatic route or requires government or sector approval, and identifying applicable conditions.

Investor and ownership analysis: Reviewing the proposed investor, ultimate beneficial ownership and any country-specific approval requirements that may apply.

Investment structure: Advising on equity shares, compulsorily convertible preference shares, compulsorily convertible debentures and other legally available funding instruments.

Pricing and valuation: Reviewing issue and transfer pricing requirements, valuation support and consideration mechanisms.

Shareholder rights: Structuring governance, reserved matters, information, anti-dilution, transfer, liquidation, exit and other rights so they operate within the Indian legal framework.

Reporting: Advising on applicable filings and coordinating with the company, authorised dealer bank, company secretary and other professionals.

Downstream investment: Reviewing indirect foreign investment and the consequences of an Indian entity with foreign investment investing into another Indian entity.

Repatriation and payments: Reviewing dividends, sale proceeds, royalties, service fees and other cross-border payments from a foreign exchange perspective.

Transfers and exits

DB Legal advises on transfers between residents and non-residents, secondary share sales, exits by foreign investors, buy-backs, capital reductions, business transfers, group reorganisations and other transactions involving cross-border ownership or payment.

The review may include pricing, payment timing, escrow, holdback, indemnity set-off, deferred consideration, regulatory filings, tax coordination and the mechanics for remitting or receiving sale proceeds.

Cross-border funding and commercial arrangements

Shareholder and group funding arrangements.

External commercial borrowings and permitted debt structures, in coordination with finance and tax advisers.

Guarantees, security and financial commitments involving non-residents.

Technology, trademark, management, support and service arrangements with overseas group entities.

Royalty, licence fee, service fee, reimbursement and cost-allocation arrangements.

Export and import-related payment and contract issues

Overseas investment by Indian persons

The Firm also advises Indian companies, founders and resident individuals on the Indian foreign exchange aspects of overseas subsidiaries, acquisitions, joint ventures, shareholding, debt, guarantees, financial commitments and restructuring under the overseas investment framework.

FEMA support across a transaction

Identify the residency, ownership, sector and proposed flow of funds.

Map the applicable foreign investment or overseas investment conditions.

Structure the instrument, ownership rights, pricing and payment mechanics.

Reflect the regulatory position in the term sheet and definitive documents.

Prepare or review corporate approvals, conditions precedent and closing deliverables.

Coordinate valuation, banking and regulatory reporting requirements.

Address delayed or historical compliance issues where identified.

Foreign exchange requirements and regulatory practice may change. Advice should therefore be based on the facts and the law applicable when the proposed transaction or payment is implemented.