• odi

    Overseas Direct Investment (ODI)

    Overseas Direct Investment is any investment made by an Indian entity by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity. This investment can be in the nature of Joint Ventures/ Wholly Owned Subsidiaries. Like FDI, there are two routes for such investments to be made: Automatic route and Approval route.

    In India, under ODI Scheme, investments can be made out of various avenues like:

    • drawal of foreign exchange from an AD bank in India
    • capitalisation of exports;
    • swap of shares
    • proceeds of External Commercial Borrowings (ECBs) / Foreign Currency Convertible Bonds (FCCBs)
    • balances held in EEFC account of the Indian party
    • other such avenues as defined by RBI from time to time

    Did you know that – “If the ODI is made out of a company’s EEFC account balances, the ceiling on the maximum remittance amount, which is linked to the Net Worth of the company, does not apply”!!!

     

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