Practice 06 · Ask before · FEMA
The regulatory layer of every cross-border decision.
FDI, ODI, ECB, LRS, compounding and routine FEMA filings, run alongside international tax so the regulatory answer and the tax answer match.
We hold the structuring view before we touch the filing. Filings come last, not first. International tax sits in the same team, so your FDI structure and your DTAA position are run by people who talk to each other.
- Foreign money coming in, Indian money going out, or a loan from abroad.
- A remittance under LRS for property, investment or a family member.
- A filing missed, a reporting gap found, or a notice from the Reserve Bank.
- A transaction that the bank’s compliance desk cannot classify.
FEMA contraventions compound in the literal sense. A late FC-GPR or an unreported ODI is cheap to fix in year one and expensive in year five, and the penalty sits with the company and its officers.
- FDISector cap analysis, route determination (automatic or approval), pricing guidelines, reporting on Form FC. The filing follows the position.
- ODI and OPIOverseas Direct and Portfolio Investment under the post-2022 framework: the ODI/OPI distinction, Form FC, annual performance reports, FLA, and the divestment side most firms ignore until it is late.
- ECBEligible borrower and recognised lender check, all-in cost ceiling, hedging, end-use, conversion into equity where relevant.
- LRSWhat is allowed, what it costs in TCS, where it gets stuck. The calculator on the home page gives the TCS figure.
- CompoundingApplication drafting, RBI representation, closing certificate. A well-drafted application changes the penalty meaningfully.
- Structuring memo before the first filing.
- Filings on time, with a tracker visible to your CFO.
- Compounding application and closing certificate where needed.
- One cross-border file where FEMA and tax agree.
Questions
Asked before the first call.
Do you handle the international tax side as well?
Yes. DTAA analysis, withholding-tax certifications, transfer pricing and taxation of non-residents under the Income-tax Act, 2025 sit in the same practice. See International Tax.
Can a contravention be fixed after the fact?
Usually, through compounding with the Reserve Bank. The penalty depends on the contravention, the delay and the quality of the application.
How much can an individual remit under LRS?
USD 2,50,000 per person per financial year. TCS applies above ₹10 lakh at 20% for most purposes other than education and medical treatment.
Do you work with the bank’s AD desk?
Yes. Most filings go through the authorised dealer bank, and most delays happen there. We prepare the file the way the AD desk wants to see it.
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