Can Indian company lend money to foreign company?

Indian companies in India may grant loans in foreign currency to the employees of their branches outside India for personal purposes provided that the loan shall be granted for personal purposes in accordance with the lender’s Staff Welfare Scheme/Loan Rules and other terms and conditions as applicable to its staff …

Can an Indian company give loan to foreign company?

Borrowing from an overseas company or a Non-Resident Indian is regulated by the Foreign Exchange Management Act, 1999. … Loans from foreign companies can be availed by Indian companies and entities. However, entities have to comply with the provisions related to foreign exchange management act.

Can Indian banks lend to foreign companies?

On Thursday, RBI said that banks can extend loan to overseas subsidiaries of Indian corporates but they have to make 2% of the loan amount as provision on such loans. … These higher provisions are in addition to country risk provision that is applicable to all overseas exposures.

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Can Indian subsidiary give loan to foreign holding company?

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.

Can Indian company give guarantee to foreign company?

Yes, the Indian party is permitted to issue performance guarantee and 50 per cent of the amount of the performance guarantees will be reckoned for the purpose of computing financial commitment to its JV/WOS overseas which should be within the limit prescribed by the Reserve Bank from time to time.

Can a foreign director give loan to company?

Yes. A director can give loan to the company.

Can I borrow money from another country?

Foreign players

The government can borrow money from foreign banks, international financial institutions, other foreign investors, such as World Bank and others, by issuing treasury bonds. … Talking about US foreign borrowing, the US borrows nearly one-third of its money from foreign countries.

Can Indian company borrow loan from NRI?

A company incorporated in India under the Companies Act can borrow money from an NRI and the borrowing can be both on repatriable and non-repatriable basis, ie the loan amount can be repaid either in India or the loan amount can be repatriated to the bank account of the NRI maintained outside India.

What is ODI form of RBI?

Overseas Direct Investment (ODI): Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase …

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Can a resident Indian borrow overseas?

A resident importer can borrow in foreign currency from the overseas supplier of goods, in foreign currency. However, the loan should be repaid inthree years. A loan in foreign exchange can also be taken by resident Indians from their close NRI relatives. … The loan amount cannot exceed US$ 2,50,000.

Can foreign holding company give loan to subsidiary?

a) As per Sub Section 3 Lender Company can give Loan/ Guarantee / Security on behalf of WOS Company. … Therefore, one can opine that whatever is situation Section 185 shall not applicable while giving Loan/ Guarantee/ Security by Holding Company to its subsidiary Company.

Can a company give interest free loan to another company?

Hitesh. Yes, Company can take interest free loan from Directors. But as per the provisions of the Section 186(7) of Companies Act, 2013, the Company which is not exempted from the provisions of section 186 as per section 186(11), can not give interest free loan to subsidiary company.

Can holding company give loan to subsidiary without interest free?

The erstwhile Section 372A of Companies Act, 1956 (‘Old Act’) provided an umbrella exemption of the applicability of the Section in case of a loan given to a wholly owned subsidiary by the holding company. Thus, allowing the holding companies to give ‘interest free loans’ to their wholly owned subsidiaries.

Is Round tripping illegal in India?

RBI vide the FAQs took a stance and strictly prohibited round tripping. In May 2019, it clarified that a foreign joint venture or wholly-owned subsidiary cannot be used by an Indian party to route investments back into India. … The RBI now seeks to liberalise this restriction to promote ease of doing business.

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How can I get RBI approval?

Procedure: For in-principle approval, Banks should send an application to the Chief General Manager, Department of Banking Operations and Development (DBOD), Reserve Bank of India, Central Office, World Trade Centre, Cuffe Parade, Mumbai-400005.

What are FEMA rules?

According to FEMA guidelines for NRIs, sale proceeds of such assets are non-repatriable outside India without RBI approval. Repatriation of up to USD 1 million per financial year is allowed if you have inherited the property or retired from employment in India.