ODI (Overseas Direct Investment)
Setting up or investing in an entity outside India — the route, the limit, the AD bank, and the annual report that keeps the door open.
Overseas direct investment is governed by the Overseas Investment Rules and Regulations, 2022, under which an Indian entity may invest in a foreign entity through the automatic route within an overall financial commitment limit of 400% of its net worth, while resident individuals invest under the Liberalised Remittance Scheme. Every ODI is routed through an AD bank, which arranges a Unique Identification Number from the RBI, and an Annual Performance Report is due for each foreign entity by 31 December.
What our ODI service covers
Structuring, execution and the reporting that follows every year.
- Route assessment: automatic or approval, and eligibility of the investor
- Financial commitment computation against the net worth limit
- Form FC filing and obtaining the Unique Identification Number
- Coordination with the AD bank for remittance and documentation
- Valuation requirements and structuring of equity, loan and guarantees
- Annual Performance Reports and reporting of subsequent changes
The four stages of an ODI
Setting it up is one thing; keeping it reported is another.
Route and eligibility
Whether the investment falls under the automatic route, and whether the investor is eligible to make it.
Financial commitment
Equity, loans and guarantees aggregated against the limit, which is calculated on net worth.
Form FC and UIN
Reporting through the AD bank, which obtains the Unique Identification Number for the foreign entity.
Annual Performance Report
An annual report for each foreign entity, due by 31 December, based on its audited accounts.
Our process
From feasibility to a maintained annual filing.
Feasibility and route
Assessing eligibility, structure and whether prior approval is required.
Documentation
Board approvals, valuation, statutory auditor's certificate and AD bank forms.
Remittance and UIN
Funds remitted through the AD bank, with Form FC filed and the UIN allotted.
Ongoing reporting
APRs each year, and reporting of disinvestment, restructuring or changes in the foreign entity.
Why ODI compliance is worth staying current on
What sets our approach apart.
An overdue APR blocks the next move
Further financial commitment and other transactions are restricted where an Annual Performance Report is outstanding for a foreign entity.
Round-tripping has conditions
The 2022 rules permit structures where the foreign entity invests back into India within limits on layers, subject to conditions that need checking upfront.
Guarantees count too
Financial commitment includes loans and guarantees extended to the foreign entity, not just equity, so the limit is reached sooner than expected.
ODI (Overseas Direct Investment) questions answered
What people ask before engaging us.
Planning an investment outside India?
We will confirm the route and the financial commitment headroom before you approach your AD bank.
