FEMA

FEMA, or the Foreign Exchange Management Act, is an Indian law that regulates foreign exchange transactions, including inward and outward remittances, foreign currency accounts, and transactions involving foreign securities. The law was enacted in 1999 to replace the Foreign Exchange Regulation Act (FERA) of 1973 and to simplify and liberalize foreign exchange controls in India.

Key features of FEMA include:
• Current and Capital Account Transactions: FEMA distinguishes between current account transactions (related to trade in goods and services) and capital account transactions (related to investments and borrowing). While current account transactions are generally freely permitted, capital account transactions are subject to certain restrictions.
• Authorized Dealers: Under FEMA, authorized dealers, typically banks authorized by the Reserve Bank of India (RBI), play a key role in facilitating foreign exchange transactions and ensuring compliance with FEMA regulations.
• Foreign Investment: FEMA regulates foreign investment in India, including the acquisition and transfer of shares, securities, and other assets by foreign investors. It specifies the conditions and limits for foreign investment in various sectors of the economy.
• External Commercial Borrowings (ECBs): FEMA governs the borrowing of funds by Indian entities in foreign currency, known as ECBs. It specifies the conditions under which ECBs can be raised and the permissible end uses of the borrowed funds.
• Penalties and Enforcement: FEMA provides for penalties for violations of its provisions, including fines and imprisonment. The law also empowers the RBI and other authorities to investigate and take enforcement action against violations.

Overall, FEMA is aimed at facilitating external trade and payments, promoting foreign investment, and maintaining stability in the foreign exchange market. Compliance with FEMA regulations is essential for individuals and entities engaging in foreign exchange transactions in India.

Under FEMA we cover

• Consultancy and reporting with regard to:
1. Investment under FDI, PIS, FII, NRI/ PIO, FVCI
2. Overseas Company formations and JV/ WOS structuring
3. Borrowing facilities under External Commercial Borrowings
4. Establishment and maintenance of Liaison Office, Branch office, project office
• Compounding of offences under FEMA
• Consultancy and opinion on FEMA matters including current/capital account transactions
• Adhoc compliances under FEMA