๐๐ซ๐ ๐ฒ๐จ๐ฎ ๐๐ง ๐๐ง๐๐ข๐๐ง ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐๐ง๐ญ๐ข๐ญ๐ฒ ๐จ๐ฐ๐ง๐๐ซ ๐ก๐๐ฏ๐ข๐ง๐ ๐ซ๐๐ ๐ข๐ฌ๐ญ๐๐ซ๐๐/๐ฉ๐ฅ๐๐ง๐ฌ ๐ญ๐จ ๐ซ๐๐ ๐ข๐ฌ๐ญ๐๐ซ ๐ฒ๐จ๐ฎ๐ซ ๐๐ง๐ญ๐ข๐ญ๐ฒ ๐ข๐ง ๐ญ๐ก๐ ๐๐?
As per RBI & FEMA guidelines, it is mandatory for you to transfer your share capital value amount to the US entity that you register through ODI (Overseas Direct Investment) transfer. And this is mandatory, for Indian governing bodies to recognise your Indian person / entity as a shareholder in the US entity. But this is something Indian companies miss out on, in most cases.
Skipping the official ODI transfer can create a legal and financial minefield.
๐๐๐ซ๐'๐ฌ ๐ฐ๐ก๐ฒ ๐ข๐ ๐ง๐จ๐ซ๐ข๐ง๐ ๐๐๐ ๐ข๐ฌ ๐ ๐๐๐ ๐ข๐๐๐:
๐๐จ๐ง ๐ซ๐๐๐จ๐ ๐ง๐ข๐ญ๐ข๐จ๐ง: India regulatory bodies doesnt recognize your US entity leading to troubles when you go for funding / exit.
๐๐๐ง๐๐ฅ๐ญ๐ข๐๐ฌ: Non-compliance with RBI rules triggers fines, penalties, or even business shutdown.
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๐ฎ๐ง๐๐ข๐ง๐ ๐ฅ๐ข๐ฆ๐ข๐ญ๐๐ญ๐ข๐จ๐ง๐ฌ: No proper ODI docs? No access to loans or credit to fuel your growth.
๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ ๐๐ฎ๐ ๐๐ข๐ฅ๐ข๐ ๐๐ง๐๐: Red flag during due diligence process of investment or M&A.