above person repatriate the
Querist :
Anonymous
(Querist) 08 March 2011
This query is : Resolved
)Can a person other than a NRI/POI make investment in india by way of capital contribution in a partnership firm? If so what is the procedure to get approval?
2)CAn above person repatriate the invsetment and the income earned over it? What is the procedure to get approval for the above?
3)CAn the above person give funds in the form of loan to the partnerhip firm in India? If so, how to proceed to get such loan and what interest should we pay and what are the pay channels?
Kindly clarify
regards
A V Vishal
(Expert) 08 March 2011
1)Can a person other than a NRI/POI make investment in india by way of capital contribution in a partnership firm? If so what is the procedure to get approval?
Restrictions on investment in a firm or a proprietary concern in India by a person resident outside India.
Save as otherwise provided in the Act or rules or regulations made or directions or orders issued thereunder, no person resident outside India shall make any investment by way of contribution to the capital of a firm or a proprietary concern or any association of persons in India :
Provided that the Reserve Bank may, on an application made to it, permit a person resident outside India subject to such terms and conditions as may be considered necessary to make an investment by way of contribution to the capital of a firm or a proprietary concern or any association of persons in India.
Permission for investment in certain cases. form A2
A non-resident Indian or a Person of Indian Origin resident outside India may invest by way of contribution to the capital of a firm or a proprietary concern in India, provided that -
a) the amount invested is received either by inward remittance through normal banking channels or out of an account maintained with an authorised dealer/authorised bank by the non-resident Indian or the person of Indian origin in accordance with the relevant Regulations; form BCI
b) the firm or the proprietary concern is not engaged in any agricultural/plantation activity or real estate business, i.e. dealing in land and immovable property with a view to earning profit or earning income therefrom;
c) the amount invested shall not be eligible for repatriation outside India;
d) where investment is made out of NRSR account of the non-resident investor, the income earned on investment or proceeds of investment shall be credited only to the NRSR account of the investor.
e) [the firm or the proprietary concern is not engaged in print media.]
2)CAn above person repatriate the invsetment and the income earned over it? What is the procedure to get approval for the above?
Ans. Permission to a firm or a proprietary concern to make payment to a non-resident Indian or a person of Indian origin who has made investment.
A firm or a proprietary concern in India may make payment to or for the credit of a nonresident Indian or a person of Indian origin the sum invested by such person in that firm or the proprietary concern or the income accruing to such person by way of profit on such investment.
3)CAn the above person give funds in the form of loan to the partnerhip firm in India? If so, how to proceed to get such loan and what interest should we pay and what are the pay channels?
Ans.Prohibition on borrowing and lending in rupees.
Save as otherwise provided in the Act, rules or regulations made thereunder, no person resident in India shall borrow in rupees from, or lend in rupees to, a person resident outside India:
Provided that the Reserve Bank may, for sufficient reasons, permit a person resident in India to borrow in rupees from, or lend in rupees to, a person resident outside India.
Borrowing in rupees by persons other than companies in India.
A person resident in India, not being a company incorporated in India, may borrow in rupees on non-repatriation basis from a non-resident Indian or a person of Indian origin resident outside India, subject to the following conditions:
(i) the amount of loan shall be received by way of inward remittance from outside India or out of Non-resident External (NRE)/Non-resident Ordinary (NRO)/Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR)/Non-resident Special Rupee (NRSR) account of the lender maintained with an authorised dealer or an authorised bank in India,form BCI4
(ii) the period of loan shall not exceed three years;
(iii) the rate of interest on the loan shall not exceed two percentage points over the Bank rate prevailing on the date of availment of loan;
(iv) where the loan is made out of funds held in Non-resident Special Rupee (NRSR) account of the lender, payment of interest and repayment of loan shall be made by credit to that account; and in other cases, payment of interest and repayment of loan shall be made by credit to the lender's Non-resident Ordinary (NRO) or Non-resident Special Rupee (NRSR) account as desired by the lender; and
(v) the amount borrowed shall not be allowed to be repatriated outside India.
