Reporting requirements and other obligations for an Indian Party under ODI Regulations

Date: 19 October 2023  

Category Tagging: RBI Regulations

Overseas Direct Investment (ODI) is investment by Indian companies to an entity overseas by way of contribution to the equity shares, by providing loan or by providing that are made through either the Automatic Route or the Approval Route. The Indian Party can invest in overseas entity by way of acquiring equity shares or by providing loan or guarantee, the overall limit of such equity, loan and guarantee shall not exceed 400% of net worth of the Indian Party.

Any Indian Party that which opts to make the investment under ODI Regulations, shall approach a designated Authorised Dealer (AD) for making the remittance of the amount. The remittance request shall be accompanied with duly filled up form ODI Part I. Form ODI-I shall accompany the documents such as

• A resolution of the Board of Directors, 
• A Certificate from the statutory Auditors, 
• Form A-2, 
• Certificate of incorporation, Memorandum & Articles of Association, PAN card copy of the Indian Entity, 
• Certificate of Incorporation, bye laws of the overseas entity. 

Upon submission and scrutiny of the documents, the remittance/ investment is processed and submitted to RBI. On remitting the funds RBI generates a Unique Identification Number (UIN) for the particular Joint Venture Company/ Wholly Owned Subsidiary (JV/ WOS). The UIN is specific to the JV/ WOS overseas and the same UIN shall be used for further investments/ remittances in the JV/ WOS.

Once the investment is made and the UIN from RBI is received, the reporting obligation of the Indian Party is as under-

• A copy of the Share Certificate issued by the overseas entity is to be submitted to the AD Bank as a proof of investment made within a period of 6 months from the date of remittance of the funds.
• Annual Performance Report (APR) – Part-II of form ODI is to be submitted by the Indian Party to the AD Bank every year separately with respect to each JV/ WOS overseas. The due date for submission of APR is 31st December every year. Copy of the annual account of the overseas entity is to be annexed with the form APR. The APR is to be certified by the Auditors.
• Annual Return on Financial Liabilities and Assets (FLA) is to be submitted to RBI every year. The due date is 15th July every year.
• The Indian Party has to ensure that it repatriates all dues such as dividend, fee, royalty etc payable form the overseas entity, within a period of 60 days of its falling due, or within the extended period if the RBI permits.
• Any changes made in the JV/ WOS such as change in the shareholding pattern, diversification of its activities, setting up of step down subsidiaries within 30 days of the approval of the decisions by the competent authority concerned of such JV/WOS in terms of the local laws of the host country.
• In case of divestment, he sale proceeds has to be repatriated to Indian within 90 days from the date of sale of the shares/securities and reporting needs to be done to the Reserve Bank through the designated AD. The reporting of the divestment/ liquidation of the foreign entity has to be done in form ODI- Part III

Read RBI notification at: RBI ODI

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