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Budget 2017 :Good news for foreign investors

The biggest news received by foreign investors, specifically foreign direct investors, this budget was the announcement by the FM towards the scrapping of the Foreign Investment Promotions Bureau (“FIPB”) . The FIPB was responsible for approving investments that were made through the approval route.

The void left by the FIPB is expected to be filled by more sectors being opened to automatic investment and a new body as announced by the Finance Minister.

Clarification on Indirect transfers

The much maligned indirect transfer provision of the act has been again clarified to ensure that the provision shall not be applicable to investments made by non-resident investors in FIIs and FPIs which are registered with the SEBI. This explanation is retrospective in nature and will serve to reduce litigation in this area.

Corpus requirements for offshore funds waived

Minimum requirements of corpus as imposed by section 9A are proposed to be waived by amendment of the fund, this is specifically in cases where the fund is being wound up. Therefore, in the financial year in which the fund is being wound up, the minimum requirement of a hundred crores shall not be applicable.

With Contributions from Anshu Mehta, Ankit Sharma, Ayesha Jain, and Mansi Singhal

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