FEMA1 min read
Overseas Direct Investment
Investment made by a person resident in India in a foreign entity through equity, loan, or guarantee. Governed by FEMA (Overseas Investment) Rules 2022. Permitted up to 400% of net worth under automatic route for most entities.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Overseas Direct Investment in Indian corporate law?▼
Investment made by a person resident in India in a foreign entity through equity, loan, or guarantee. Governed by FEMA (Overseas Investment) Rules 2022. Permitted up to 400% of net worth under automatic route for most entities.
Q2. Why is Overseas Direct Investment important for compliance?▼
Overseas Direct Investment is governed by the Foreign Exchange Management Act, 1999 and regulated by RBI. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Overseas Direct Investment?▼
Overseas Direct Investment is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with FEMA regulatory matters in India.
Contextual Analysis & Regulatory Updates🔗
Read our latest analysis and critical updates on corporate circulars related to FEMA:
RBI Issues Foreign Exchange Management (Deposit) Sixth Amendment Regulations, 2026 — SNRR Account Norms Eased
Published: 30 June 2026
RBI Withdraws 732 Defunct FEMA Circulars Under Regulatory Rationalisation Drive (A.P. DIR Series Circular No. 18, 2026)
Published: 25 June 2026
FEMA 395(4)/2026-RB: NRI/OCI Investment Payment Rules Amended — NRO Accounts Permitted for NPS, Designated Rupee Account Mandated
Published: 23 June 2026