Foreign Exchange Management Act (FEMA)

The scope of business is not limited to a state or to a country rather it has been expended throughout the world. Overseas expansion account to a much broader opportunity for business world. The countries worldwide have different set of rules and regulations regarding foreign transaction compliances.

Foreign Exchange Management Act (FEMA)

The scope of business is not limited to a state or to a country rather it has been expended throughout the world. Overseas expansion account to a much broader opportunity for business world. The countries worldwide have different set of rules and regulations regarding foreign transaction compliances. With International Trade achieving new milestones it is essential to have a reliable legal consultant. In this regard, our services expand from advisory on transactions related to Foreign Exchange, providing opinion on different type transactions which may attracts applicability of provisions for foreign exchange management Act to execute post transaction compliances/returns with regulatory authorities.

In India business ventures and investments are managed by FEMA. The rules and regulations defined by RBI are also supervised by FEMA. Foreign Exchange Management Act regulates these services for free flow of foreign Exchange in India. The applicability of FEMA is extended up to branches of it in foreign countries, if it belongs to a person who is resident of India.

Characteristics And Objectives Of FEMA:

  • Amendment and consolidation of foreign exchange laws and facilitating external trade and payments accounts to the main responsibilities of FEMA. It was formulated for promotion of orderly development and maintenance of foreign exchange market in India.
  • Foreign Exchange dealings or foreign security transfer is prohibited by FEMA for the unauthorized person.
  • It is prohibited by FEMA to incur payment for the one who resides out of India
  • Foreign exchange management act also mandates that if any person residing in India received any Forex payment (without a corresponding inward remittance from abroad) the concerned person shall be considered to have received this payment from a non-authorized person.
  • There are 7 types of transactions which are prohibited under current account. These include transaction relating to, football pools, lotteries, banned magazines and others.
  • Certain prescribed limits have been increased after the implementation of foreign exchange management act 1999.
  • Foreign exchange management act 1999 stringent rules had vast impact in international trade transactions. It attracted foreign exchange and different payment modes. At regular intervals, RBI release notifications and circulars outlining the modifications related to sections of FEMA
  • FEMA offers complete freedom to own or transfer any foreign security situated outside India.
  • The same freedom enjoyed by the resident who have acquired immovable property from an ROI.
  • An ROI is permitted to hold shares, securities and properties acquired by him while he was a Resident or inherited such properties from a Resident.