The Foreign Exchange Management Act (FEMA) 1999 regulates all foreign exchange transactions in India, governing cross-border payments, foreign investments, and external commercial borrowings. Compliance with FEMA is crucial for businesses engaged in international trade, foreign investments, or receiving funds from abroad. Our expert team provides comprehensive FEMA advisory services, helping you navigate complex regulations, ensure timely filings with RBI, and maintain complete compliance with all foreign exchange laws to avoid penalties and legal complications.
"In the global economy, FEMA compliance is not just a legal requirement—it's the foundation of credible international business operations and seamless cross-border transactions."
FEMA compliance encompasses various aspects including Foreign Direct Investment (FDI), Overseas Direct Investment (ODI), External Commercial Borrowings (ECB), Liberalized Remittance Scheme (LRS), and reporting requirements to RBI. Non-compliance can result in severe penalties up to three times the amount involved. Our team ensures your business stays compliant through proper documentation, timely filings, and strategic advisory on foreign exchange matters.
We provide end-to-end FEMA compliance solutions including RBI filings, transaction structuring, regulatory approvals, and compounding applications. Our expertise ensures your cross-border transactions are fully compliant with all applicable foreign exchange regulations.
FEMA (Foreign Exchange Management Act, 1999) regulates all foreign exchange transactions in India. Any entity or individual dealing with foreign currency, cross-border payments, foreign investments, external borrowings, or overseas investments must comply with FEMA regulations administered by RBI.
FEMA violations can attract penalties up to three times the sum involved in the contravention. For continuing contraventions, an additional penalty of up to ₹5,000 per day may be imposed. In serious cases, assets may be seized and directors may face personal liability.
FDI (Foreign Direct Investment) compliance involves adherence to sector-specific caps, entry routes (automatic or government approval), pricing guidelines, and reporting requirements like FC-GPR, FC-TRS, and Annual Return on Foreign Liabilities and Assets (FLA). Timely filing with RBI is mandatory.
LRS allows resident individuals to remit up to USD 250,000 per financial year for permitted capital and current account transactions like overseas education, travel, gifts, investments in foreign shares/property, or maintenance of relatives abroad. Proper documentation and declarations are required.
Compounding is a voluntary process to regularize FEMA contraventions by paying a compounding fee to RBI. It provides relief from adjudication proceedings and penalties. The compounding application must disclose the contravention details, and RBI determines the compounding amount based on violation severity.
