Sponsor contribution to an AIF set up in overseas jurisdiction, including IFSCs- (Reserve Bank of India) (12 May 2021)
MANU/APDR/0010/2021
Banking
1. Attention of AD Category - I banks is invited to paragraph A.3.(e) and B.6 of Master Direction No.15 dated January 1, 2016, on "Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad", as amended from time to time and Regulation 7 of the Notification FEMA 120/2004-RB, pertaining to provisions for an Indian Party (IP) making investment/ financial commitment in an entity engaged in the financial services sector.
2. It has been decided that any sponsor contribution from a sponsor IP to an Alternative Investment Fund (AIF) set up in an overseas jurisdiction, including International Financial Services Centres (IFSCs) in India, as per the laws of the host jurisdiction, will be treated as Overseas Direct Investment (ODI). Accordingly, IP, as defined in regulation 2(k) of the Notification ibid. can set up AIF in overseas jurisdictions, including IFSCs, under the automatic route provided it complies with Regulation 7 of the Notification FEMA 120/2004-RB.
3. All the other provisions under the Notification ibid. shall remain unchanged. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
4. The Master Direction No. 15 dated January 01, 2016, is being updated to reflect the changes.
5. The directions contained in this circular have been issued under section 10 (4) and 11(1) of the FEMA and are without prejudice to permissions/approvals, if any, required under any other law.
Tags : SPONSOR CONTRIBUTION AIF OVERSEAS JURISDICTION
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