loan from indian subs. to foreign holding

[naresh kumar]

Dear friends,

Please tell me that are the provisions(under FEMA) when a Indian subsidiary company gives loan to its foreign holding company???

 

Its little bit urgent

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--Thanks & Regards--

Naresh Kumar
ACS, LL.B.

MOBILE- 9910683177, 9990892282

[R V SECKAR]

Hello,


Financial commitment means the amount of direct investment outside India by way of contribution to equity and loans and 100% of the amount of guarantee issued by an Indian Party to or on behalf of its overseas Holding company.

Payment should be routed through your authorised dealer (banker).

No prior registration with the Reserve Bank is necessary for making direct investments under the automatic route. After the report of the first remittance/investment in form ODi is received by the Reserve Bank, from the designated Authorised Dealer, an Identification Number for that particular JV/WOS will be issued for the purpose of taking on record the overseas direct investment with the objective of maintaining a database for monitoring the outflows/inflows in espect of the overseas entities. Subsequent investments in the same project can be made only after allotment of the Identification Number.

R.V.Seckar

Please do visit my blog : http://rvsekar.blogspot.com/

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[naresh kumar]

THANK U but actually i did nt understand, its not investment, its a loan so can it be possible if yes then under which provision of FEMA?

[R V SECKAR]

Hello,

Loans can be made by a subsidiary to foreingn holding company and Form ODI has to be submitted to Authorised dealer. Under FEMA , investment in equity , lending loan and extending guarantee will all fall under ODI.
A subsidiary can make  direct investment outside India by way of contribution to equity and loans and 100% of the amount of guarantee issued by an Indian Party to or on behalf of its overseas Holding company.


R.V.S

[yoganand l]

but the holding company cannot make further investment in the subsidiary if it is making a loan to the holding company..

 

regards,

yogan.

[naresh kumar]

thanx, ok thn now i hav to read the ODI regulations??