Select Your Location
NBFC in India has witnessed huge growth in Indian Market. Considering growth factor and expanding business globally, NBFCs have started looking to set up subsidiary/JVs in abroad.
The Reserve Bank of India (RBI) has paved the way for all NBFC desirous of setting up overseas branch/subsidiary/joint venture/representative office or undertaking investments abroad. RBI has mandated all such NBFC to obtain No Objection Certificate from Department of Non-Banking Supervision from the concerned regional office of the RBI.
Table of Contents
NBFC (opening of Branch/Subsidiary/Joint Venture/Representative office or undertaking Investment abroad by NBFCs) Direction 2011 as amended time to time, (NBFC outbound Investment Direction) outlined the general and specific conditions subject to which the NOC will be issued the DNBS. Directions are applicable to both deposit taking as well as non-deposit taking NBFCs. Also, in addition to above, the FEMA regulation shall be applicable.
NBFC desire to set up Subsidiary or wholly owned subsidiary overseas shall satisfy conditions:
In addition to above conditions below some are the specific conditions are required to comply with:
As a general policy =, NBFCs are not allowed to open any branch abroad, but if any NBFCs who have already a branch opened in abroad for undertaking financial business shall allow continuing its operation after complying the provisions of revised guidelines as applicable.
The representative office can be set up abroad for the below purpose:
However, such entity shall not undertake any activity which involves an outlay of funds.
The NBFC has to comply with the above provisions in addition to the provisions of FEMA. i.e. The NBFC has to comply with the provisions of FEMA as well as above guidelines.
In accordance with the provisions of FEMA outbound regulations in following cases of outbound investment RBI approval is required:
There are two ways of making an investment in abroad i.e Automatic route and Approval route. The Applicant shall file an application in accordance with the provisions of FEMA. In addition, the applicant shall comply with the above provisions. The applicant shall obtain ‘No Objection Certificate’ (NOC) from the Department of Non-Banking Supervision of RBI before making an investment.
Read our article:NBFC: Things to know before Incorporating this Financial Institution
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Are you human?: 1 + 1 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
A Micro finance institution can be set up as an NBFC. There are certain requirements that should be met for setting...
31 May, 2021
Chit fund is a popular option for saving by contributing money in India. It is an unorganized money market industry...
15 Jul, 2019
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!