Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Amendment)Regulations, 2018, as updated on 1st June 2018
The RBI has notified the following amendments in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017 dated 26th March 2018 effective from 2nd June 2018-
- FDI in companies engaged in Investment and not registered as Non-Banking Financial Companies (NBFCs) or Core Investment Companies (CICs) will require prior Government approval. However, Foreign Investment in companies registered as NBFCs will continue to enjoy benefit of 100% automatic route subject to the Sectoral conditions attached therewith
- Companies having FDI and who appointed an auditor/audit firm having international network, will now have to appoint joint auditor, wherein one of the auditors should not be part of the same network.
- FDI in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and Regional Air Transport Service which earlier was allowed up to 49% only is now permitted up to 100% i.e. automatic up to 49% and government approval beyond 49%, subject to satisfaction of certain Sectoral conditions.
- Real estate broking services are now excluded from the definition of ‘real estate business’ paving way for 100% FDI in real estate broking services under automatic route.
- Much awaited notification of allowing FDI under 100% automatic routes for Single Brand Retail Trading is now notified. The same is notified with amendments in certain sectoral related conditions, the most prominent one being the introduction of incremental sourcing requirements.