FEMA Compliance - Overview
FEMA Compliances in India plays a vital role in the growth and success of various business types for outside trade exchanges. The purpose of launching the Foreign Exchange Management Act, 1999 (FEMA) is to tranquil external trade, to maintain healthy foreign transactions or exchange market in India and to promote the importance of balance payments of the business dealings.
FEMA Compliance Guidelines and Features
FEMA is not applicable to Indian citizens who resident outside India
FEMA issues the authority to the central government to enforce restrictions on three important things and to supervise those important things as well. The three important things are the payment or amount given to any individual from foreign countries, the payment received from any individual who is residing outside India, forex, and foreign security deals.
It indicates the territories around acquisition/holding of forex that requires the Reserve Bank of India (RBI) or the government.
List of substantial compliance that is essential to follow
Annual Return on Foreign Assets and Liabilities
External Commercial Borrowings
Annual Performance Report (APR)
Single Master Form (w.e.f 30.06.2018)
Advance Reporting Form (ARF)
Form FC- TRS
Form FC-GPR
Form ODI
Documents Required For Registration
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FEMA classifies foreign exchange transactions into two categories:
1. Capital Account
2. Current Account
The purpose of capital account transaction is to adjust the assets and liabilities outside or inside India and an individual who resides outside India. Thus, any transaction that has led to a change in overseas assets and liabilities for an Indian resident in a remote nation or vice versa falls under the category of capital account transaction. Any other sort of transaction falls into the category of a current account.
Process To Register
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