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RBI · Overseas Investment

Setting Up an Overseas Subsidiary from India – FEMA Overseas Investment Rules

Last updated: 2 October 2026

Indian companies can set up or acquire businesses abroad under the Overseas Investment Rules, 2022 — within limits and with reporting through their AD bank. Expertvuw’s team checks eligibility and limits, prepares the documents for the AD bank and coordinates the overseas incorporation.

Overview

How Overseas Investment Works

Under the Foreign Exchange Management (Overseas Investment) Rules and Regulations, 2022, an Indian entity can make overseas direct investment (ODI) in a foreign entity engaged in a bona fide business activity, subject to conditions. Most investments fall under the automatic route through the Indian entity’s AD bank; some require RBI or government approval.

The Indian entity’s total financial commitment — equity, debt and non-fund-based commitments such as guarantees — is generally limited to 400% of its net worth as per the last audited balance sheet. Investments in certain sectors, such as real estate and gambling, are not permitted, and structures that create round-tripping need care.

Before the first remittance, the AD bank obtains a Unique Identification Number (UIN) for the overseas entity. The investment is reported in Form FC, and thereafter Annual Performance Reports and other filings apply.

Basis: FEMA, 1999; Foreign Exchange Management (Overseas Investment) Rules, 2022; FEM (Overseas Investment) Regulations, 2022; RBI Master Direction – Overseas Investment. Last updated: 27 September 2026.

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What This Service Covers

What We Help With

1

Checking eligibility, bona fide business and prohibited activities

2

Computing net worth and financial commitment limits

3

Board resolutions and valuation where needed

4

Documentation for the AD bank, UIN and Form FC

5

Coordinating incorporation abroad with local advisers

Key Facts

Automatic route

Most ODI is made through the AD bank without prior RBI approval.

400% limit

Financial commitment is generally capped at 400% of net worth.

Bona fide business

The foreign entity must carry on a bona fide business activity.

Prohibited sectors

Real estate business, gambling and certain financial products are restricted.

UIN

The AD bank obtains a UIN before the first remittance.

Ongoing reporting

APR by 31 December each year and FLA return annually.

Common Issues

Common Mistakes

Overseas setup issues often begin before the first remittance.

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Related Services

Related services

Overseas setup connects with these services.

Overseas Subsidiary Compliance

Ongoing APR and reporting.

Delaware Company

Setting up a US company.

Singapore Company

Setting up in Singapore.

UAE Free Zone

Setting up in a UAE free zone.

Documents Required

Documents we need from you

Indian Entity

Overseas Entity

Our Process

How We Work

1

Assess

Check eligibility, route and limits.

2

Structure

Agree structure and funding.

3

Approvals

Pass board resolutions and gather documents.

4

Incorporate

Coordinate incorporation abroad.

5

AD bank

Obtain UIN and remit funds.

6

Report

File Form FC and set up annual reporting.

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After Setup

After Setup

The overseas entity brings annual FEMA duties.

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Get in Touch

Share your query and our team will reply during business hours.






    FAQs

    Frequently Asked Questions

    Can an Indian company set up a subsidiary abroad without RBI approval?

    Yes, in most cases under the automatic route through its AD bank, subject to the Overseas Investment Rules.

    Total financial commitment is generally limited to 400% of its net worth as per the last audited balance sheet.

    A Unique Identification Number for the overseas investment, obtained through the AD bank before the first remittance.

    Investment in real estate business abroad is restricted under the Overseas Investment Rules.

    The Annual Performance Report by 31 December, the FLA return, and reporting of further investments and changes.

    About Expertvuw

    Who Handles Your Overseas Setup

    CS Chetna Shoor, Company Secretary and Director, Expertvuw

    CS Chetna Shoor

    ACS – Director, Expertvuw Management Pvt Ltd

    FEMA filings are prepared by Expertvuw’s team. Certificates required by the AD bank or RBI are issued by independent practising professionals, and representation before RBI or the Directorate of Enforcement is made by authorised professionals or advocates.

    Expertvuw Management Pvt Ltd