Legal requirments to start pre-school by a foreigner in a partnership
Sharath Babu
(Querist) 04 June 2013
This query is : Resolved
Hello friends,
I am an advocate and I need little information on the following and it would be great if you could give me your expertised advise on the same
Query: - My client (Indian)wanted to start a pre-school with partnership with a foreigner (US National)and later grow it slowly to elementary and middle school.
- Total investment 15 lakhs
- partnership with a share of 60% (Indian) and 40% (Foreigner).
Please let me know
1) Whether approvals and license from concerned education departments are needed?
2) what are the legal requirements for getting into partnership with a foreign national as the flow of investment will be from outside.
3) Do we need to inform RBI and take permission or it comes under FDI.
4) what are the other requirements.
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Advocate Sastry
(Expert) 05 June 2013
The following are the FEMA guidelines:
As per FDI regulation a person resident outside India other than NRIs/PIO may make an application and seek prior approval of Reserve Bank for making investment by way of contribution to the capital of a firm or a proprietorship concern or any association of persons in India. The application will be decided in consultation with the Government of India.
A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside India may however can invest (without approval) by way of contribution to the capital of a firm or a proprietary concern in India on non-repatriation basis provided;
(a) Amount is invested by inward remittance or out of NRE/FCNR(B)/NRO account maintained with Authorized Dealers / Authorized banks.
(b) The firm or proprietary concern is not engaged in any agricultural/plantation or real estate business or print media sector.
(c) Amount invested shall not be eligible for repatriation outside India.
NRIs/PIO may seek prior permission of Reserve Bank for investment in sole proprietorship concerns/partnership firms with repatriation benefits. The application is decided in consultation with the Government of India.
An NRI or PIO is, however not allowed to invest in a firm or proprietorship concern 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 there from) or engaged in Print Media.
R.K Nanda
(Expert) 05 June 2013
no more to add.
Sharath Babu
(Querist) 06 June 2013
Thank you Mr.Sastry and Mr.R.K.Nanda for your valuable information.
