Ministry : Securities and Exchange Board of India

Department/Board : Alternative Investment Fund and Foreign Portfolio Investors Department

Circular No. : SEBI/HO/AFD-1/PoD/CIR/P/2022/108

Date : 17.08.2022

Notification/ Circulars Referred : Circular No. CIR/IMD/DF/7/2015 dated October 01, 2015 MANU/SFII/0002/2015

Citing Reference:
Circular No. CIR/IMD/DF/7/2015 dated October 01, 2015 MANU/SFII/0002/2015  Referred


All Alternative Investment Funds
All Venture Capital Funds [registered under erstwhile SEBI (Venture Capital Funds) Regulations, 1996]

Sir/ Madam,

Guidelines for overseas investment by Alternative Investment Funds/Venture Capital Funds

1. In terms of Regulation 12(ba) of erstwhile SEBI (Venture Capital Funds) Regulations 1996 and Regulation 15(1)(a) of SEBI (Alternative Investment Funds) Regulations, 2012, AIFs/VCFs may invest in securities of companies incorporated outside India subject to such conditions or guidelines that may be stipulated or issued by the Reserve Bank of India and SEBI from time to time.

2. In this regard, the following is specified -

(i) AIFs/VCFs shall file an application to SEBI for allocation of overseas investment limit in the format specified at Annexure A.

(ii) The requirement of the overseas investee company to have an Indian Connection, as specified in para 3(ii) of SEBI Circular No. SEBI/VCF/CIR No. 1/98645/2007 dated August 09, 2007 and para 2(A)(e)(i) and para 2(B)(c)(iv) of SEBI Circular No. CIR/IMD/DF/7/2015 dated October 01, 2015, has been done away with.

(iii) AIFs/VCFs shall invest in an overseas investee company, which is incorporated in a country whose securities market regulator is a signatory to the International Organization of Securities Commission's Multilateral Memorandum of Understanding (Appendix A Signatories) or a signatory to the bilateral Memorandum of Understanding with SEBI.

(iv) AIFs/VCFs shall not invest in an overseas investee company, which is incorporated in a country identified in the public statement of Financial Action Task Force (FATF) as:

(a) a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or

(b) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with FATF to address the deficiencies.

(v) If an AIF/VCF liquidates investment made in an overseas investee company previously, the sale proceeds received from such liquidation, to the extent of investment made in the said overseas investee company, shall be available to all AIFs/VCFs (including the selling AIF/VCF) for reinvestment.

(vi) AIFs/VCFs shall transfer/sell the investment in overseas investee company only to the entities eligible to make overseas investments, as per the extant guidelines issued under the Foreign Exchange Management Act, 1999.

(vii) AIFs/VCFs shall furnish the sale/divestment details of the overseas investments to SEBI in the format given at Annexure B within 3 working days of the divestment, by emailing to, for updating the overall limit available for overseas investment by AIFs/VCFs.

(viii) All the overseas investments sold/divested by AIFs/VCFs till date, shall also be reported to SEBI in the format given at Annexure B within 30 days from the date of this circular, by emailing to

3. The Trustee/Board/Designated Partners of the AIFs/VCFs shall submit an undertaking to SEBI as specified at Annexure A with respect to the proposed overseas investment.

4. This Circular shall come into force with immediate effect.

5. This circular is issued with the approval of the competent authority.

6. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

7. The circular is available on SEBI website at under the categories "Legal framework - Circulars" and "Info for - Alternative Investment Funds".

Yours faithfully,
Sanjay Singh Bhati
Deputy General Manager