Under the Overseas Direct Investment (ODI) framework governed by the Reserve Bank of India (RBI), Indian entities and resident individuals engaging in overseas investments are subject to several reporting obligations to ensure transparency and compliance. Here’s an overview of these obligations:

1. Reporting Obligations for Indian Entities

Indian entities making overseas investments under the ODI framework must adhere to the following:

a. Form FC (Foreign Currency Reporting)

• To be filed with the Authorized Dealer (AD) Bank at the time of remittance.
• Captures details such as the amount, purpose, and destination of the overseas investment.

b. Annual Performance Report (APR)

• Required to be submitted annually by Indian entities that have made overseas investments.
• It includes:
  • Financial details of the foreign entity, such as profit/loss, net worth, and return on investment.
  • Other performance-related indicators.
• Due date: Within six months of the close of the financial year.

c. Shareholding/Beneficiary Details

• Any changes in the shareholding pattern of the foreign entity or the Indian investor’s stake must be reported.
• The report should also include details on the winding-up or liquidation of the foreign entity, if applicable.

d. Form ODI

• Submitted at the time of initial investment and for subsequent remittances.
• Required for all types of overseas investments, including equity capital, debt, guarantees, etc.

e. Post-Investment Changes

• Changes such as additional investments, disinvestments, or restructuring of the foreign entity must be reported.

2. Reporting Obligations for Resident Individuals

Resident individuals investing abroad under the Liberalized Remittance Scheme (LRS) or ODI guidelines are required to:

a. Form A2

• Filed at the time of remittance for investment abroad.
• Provides details of the amount and purpose of the remittance.

b. APR (if applicable)

• Required only if the individual has a controlling interest or significant stake in the overseas entity.

c. Disclosure in Income Tax Returns

• Individuals must disclose overseas assets and income in their annual income tax returns.

d. Reporting of Disinvestment

• Any disinvestment or sale of overseas assets must be reported to the AD Bank and the RBI.

3. Key Timeframes for Reporting

• APR: Within six months of the financial year-end.
• Changes in Investment Structure: To be reported within 30 days.
• Disinvestment/Closure: To be reported within 30 days of completion.

Non-Compliance and Penalties

Failure to comply with these reporting obligations may result in:

• Penalties under the Foreign Exchange Management Act (FEMA).
• Prohibition from making further overseas investments.
• Additional scrutiny from regulatory authorities.

Additional Notes

• Ensure all reporting is routed through the designated AD Bank.
• Maintain proper documentation for all transactions to support compliance.
• Periodic updates on regulations should be monitored, as the RBI may amend guidelines from time to time.

Would you like detailed information on specific forms or compliance steps?