What is LRS?
Liberalised Remittance Scheme (LRS)
- Allows resident individuals to remit up to USD 2,50,000/year
- No prior RBI approval needed for:
- Education
- Medical treatment
- Investments abroad
ODI Limits
Indian Company / LLP:
Can make financial commitments (FC) in a foreign entity upto 400% of net worth (as per latest audited balance sheet)
Includes:
- Equity Investments
- Loans
- Guarantees Issued
Resident Individual:
- Can invest up to USD 2,50,000/year under LRS without RBI approval
- More than this? 👉 Requires RBI approval
Disinvestment of ODI
- Selling/transferring foreign ownership is Disinvestment, subject to certain restrictions
- Report to AD (Authorized Dealer) Bank within 30 days of receipt of funds
- Holding period of 1 year mandatory (from the date of making the ODI)
Exemption: If shares are not allotted by foreignentity within 6 months from the date of initial investment
Mandatory reporting after ODI
Compliance doesn’t end after remittance!
You must:
- Submit Share Certificates: One time submission within 6 months from the date of remittance
- File Annual Performance Report (APR): Every year on or before December 31st
- Submit Foreign Liabilities and Assets (FLA) Return (for entities): Every year on or before July 15th
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