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FOREIGN EXCHANGE MANAGEMENT (INVESTMENT IN FIRM OR PROPRIETARY CONCERN IN
INDIA) REGULATIONS, 2000
Notification
No. 24 dated 3rd May 2000
G.S.R.410
(E), dated 3.5.2000- In exercise of the powers conferred by clause
(h) of sub-section (2) of section 47 of the Foreign Management Act, 1999 (42 of
1999), the Reserve Bank makes the following regulations to regulate investment
by a person resident outside India in a partnership firm or a proprietary
concern in India, namely:
(i)
These Regulations may be called the Foreign Exchange Management
(Investment in Firm or proprietary Concern in India) Regulations, 2000.
(ii)
They shall come into force on the 1st day of June 2000.
In
these regulations, unless the context requires otherwise, -
(i)
�Act � means the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii)
�authorised bank� means a bank including a co-operative bank (other
than an authorised dealer) authorised by the Reserve Bank to maintain an account
of a person resident outside India;
(iii)
�authorised dealer� means a person authorised as an authorised dealer
under sub-section (1) of section 10 of the Act;
(iv)
�Non Resident Indian (NRI)� means a person resident outside India who
is a citizen of India or is a person on Indian origin:
(v)
�NRSR account� shall have the same meaning as assigned to it in the
Foreign Exchange Management (Deposit) Regulations, 2000.
(vi)
�Person of Indian Origin� means a citizen of any country other than
Bangladesh or Pakistan or Sri Lanka, if
(a)
he at any time held Indian passport; OR
(b)
he or either of his parents or any of his grandparents was a citizen of
India by virtue of the Constitution of India or the Citizenship Act 1955 (57of
1955);
(c)
the person is a spouse of an Indian citizen or a person referred to in
sub clause (a) or (b);
(vii)
the words and expressions used but not defined in these Regulations shall
have the same meanings respectively assigned to them in the Act .
Save
as otherwise provided in the Act or rules or regulations made or directions or
orders issued thereunder, no person resident outside India shall make any
investment by way of contribution to the capital of a firm or a proprietary
concern or any association of persons in India:
Provided
that the Reserve Bank may, on an application made to it permit a person resident
outside India subject to such terms and conditions as may be considered
necessary to make an investment by way of contribution to the capital of a firm
or a proprietary concern or any association of persons in India.
A
non-resident Indian or a person or Indian origin resident outside India may
invest by way of contribution to the capital of a firm or a proprietary concern
in India provided that-
(a)
the amount invested is received either by inward remittance through
normal banking channels or out of an account maintained with an authorised
dealer/ authorised bank by the non-resident Indian or the person of Indian
origin in accordance with the relevant Regulations;
(b)
the firm or the proprietary concern is not engaged in any agricultural/
plantation activity or real estate business, i.e. dealing in land and
immovable property with a view to earning profit or earning income there from ;
(c)
the amount invested shall not be eligible for repatriation outside India;
(d)
where investment is made out of NRSR account of the non-resident
investor, the income earned on investment or proceeds of investment shall be
credited only to the NRSR account of the investor
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