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Implications of RBI Overseas Investment Rules On Indian Investors

Inc42 · 1y ago

Implications of RBI Overseas Investment Rules On Indian Investors

The Reserve Bank of India (RBI) has introduced revised guidelines for overseas investments, impacting Indian investors who want to diversify their portfolios globally. The guidelines aim to enhance transparency and regulatory compliance, requiring investors to disclose their overseas investments to the RBI. Startups receive certain relaxations, allowing them to invest in overseas ventures without prior approval. The tax rate on outbound remittances has increased to 20%. Restrictions on joint acquisition of immovable property have been eliminated. The revised regulations also facilitate overseas operations and provide easier access for non-banking financial companies (NBFCs). Compliance procedures and proactive engagement with regulatory changes are crucial. The liberalisation of overseas investment rules is expected to attract more foreign direct investment into India and foster innovation and collaboration in sectors like fintech and healthcare.

Related News

Mutual funds call for easing RBI's limit on overseas investments amid growing opportunities

Money Control

Money Control · 1y ago

Mutual funds call for easing RBI's limit on overseas investments amid growing opportunities

The Securities and Exchange Board of India (SEBI) has instructed mutual funds to cease accepting subscriptions for investments in overseas ETFs from April 1, 2024, to avoid exceeding the $1 billion investment limit. This decision has sparked discussions about raising the investment limits for mutual funds in overseas markets, particularly as the existing limit of $7 billion has been exhausted for over two years. While the mutual fund industry has been requesting an increase, the Reserve Bank of India (RBI) has not revised the limit since 2007-08. Some argue that raising the limits would provide Indian investors with more diversification opportunities and professional money management, but others point out potential risks in terms of market volatility.

Govt asks RBI to exempt sovereign funds from alternative investment fund rules

VCCircle

VCCircle · 1y ago

Govt asks RBI to exempt sovereign funds from alternative investment fund rules

The Indian government has requested the Reserve Bank of India (RBI) to exempt sovereign funds from the tightened rules regarding investments in alternative investment funds (AIFs). The rules were introduced in December to prevent evergreening of loans and were partially eased in March. The government has written to the RBI, specifically mentioning the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, which is aimed at rescuing stressed real estate projects. The RBI may consider exempting sovereign funds on a case-by-case basis. This move aims to encourage banks to provide funding to projects supported by SWAMIH.

Want to invest in US equities? Here’s how you can use the Liberalised Remittance Scheme

Money Control

Money Control · 12m ago

Want to invest in US equities? Here’s how you can use the Liberalised Remittance Scheme

Despite recent market fluctuations, investing in US stocks, such as Nvidia and Tesla, can be a lucrative opportunity for Indian investors. Through the Liberalised Remittance Scheme (LRS), Indian residents can easily transfer funds to invest in the US stock market. Benefits of investing in US equities include diversification, exposure to fast-growing and innovative companies, potential gains from USD appreciation, and better resilience against unexpected shocks in the Indian market. Investors have the option to open an overseas trading account or use fintech apps to facilitate investments in US stocks. However, investors should be mindful of additional charges and tax implications.

How ultra HNIs can future-proof overseas education for their children

Livemint

Livemint · 16d ago

How ultra HNIs can future-proof overseas education for their children

For ultra-high-net-worth individuals (UHNI), planning for overseas education involves complex financial strategies, including global mobility, wealth management, and legacy planning. Many UHNI families must navigate Reserve Bank of India (RBI) regulations, tax implications, and strategic planning to fund education abroad effectively. The process requires comprehensive financial decisions and adherence to compliance to ensure a future-ready approach to their children’s international education journey.

RBI eases recently tightened rules for investments by banks, NBFCs in AIFs

VCCircle

VCCircle · 1y ago

RBI eases recently tightened rules for investments by banks, NBFCs in AIFs

India's central bank, the Reserve Bank of India (RBI), has eased its recently tightened rules on investments by banks and non-banking finance companies (NBFCs) in alternative investment funds (AIFs). The rules, which required higher provisions to be set aside, were originally put in place to address concerns about the use of AIFs to mask bad loans. However, the RBI has now clarified that banks only need to cover the portion of their investment in an AIF that is further invested in the debtor company.

SPF proposes taskforce to streamline reverse-flips for startups seeking a faster way home

YourStory

YourStory · 3m ago

SPF proposes taskforce to streamline reverse-flips for startups seeking a faster way home

The Startup Policy Forum (SPF) is advocating for regulatory changes to facilitate the re-domiciliation of Indian-origin startups from overseas back to India, aiming to streamline the transition process and reduce compliance costs. Despite recent market volatility, India remains a favored listing destination for startups. SPF suggests forming an "Ease of Reverse Flip Taskforce" to address challenges around legal procedures, tax implications, and foreign investment regulations, ensuring smoother transitions for startups planning to go public in India.

SEBI tweaks Foreign Venture Capital Investors' registration, eligibility criteria

YourStory

YourStory · 11m ago

SEBI tweaks Foreign Venture Capital Investors' registration, eligibility criteria

India's capital markets regulator, SEBI, has introduced new rules to streamline the registration process for Foreign Venture Capital Investors (FVCIs). The rules delegate the registration process to designated depository participants, bringing it in line with provisions for Foreign Portfolio Investors. The changes also allow Resident Indians, Non-Resident Indians, and Overseas Citizens of India to be constituents of FVCI applicants, subject to conditions. Currently, FVCIs must appoint a domestic custodian to monitor their investments in India and provide reports to SEBI. The amendments will come into force on January 1, 2025.

P2P startups look to overhaul biz, processes amidst RBI crackdown

Economic Times

Economic Times · 9m ago

P2P startups look to overhaul biz, processes amidst RBI crackdown

Peer-to-peer lending startups in India are making changes to their operations in order to comply with regulations from the Reserve Bank of India (RBI). Fintech platform Mobikwik is now processing all withdrawals on the 12th of each month and crediting them to investors' bank accounts within three working days. Other platforms, such as BharatPe and Cred, have halted their P2P lending products, while Faircent has shifted towards offline channels and working with investment advisors. The RBI has taken action against companies that violated P2P lending rules, with fines of around Rs 1.9 crore ($258,250) issued to Liquiloans and Lendenclub.

Overseas investors make close to $100 billion from India investments

Economic Times

Economic Times · 1m ago

Overseas investors make close to $100 billion from India investments

Overseas investors repatriated a near-record $97.7 billion from Indian assets in FY25, up from $87.5 billion in FY24, showcasing India's appeal as a global investment hub. These earnings stemmed from dividends, interest, and profits on investments, especially amidst rising FDI inflows and increased interest in Indian debt due to local bonds being added to the JPMorgan index. This boosted India's economic profile, even as it managed to control the investment income deficit.

Government Proposes 35% Corporate Tax Rate For Foreign Companies

Inc42 · 1y ago

Government Proposes 35% Corporate Tax Rate For Foreign Companies

The government has suggested reducing the corporate tax rate for foreign companies to attract foreign investment. They have also proposed loosening regulations on foreign direct investment and overseas investment. Furthermore, the government plans to abolish the 'Angel Tax' for all categories of investors to support the growth of startups.

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