Checked against the sources on 14 November 2026.
An Indian company that takes shares in an unlisted company abroad is making an overseas direct investment (ODI), however small the holding.1 The money cannot leave India until the bank has the papers and a Unique Identification Number (UIN) has been allotted for the overseas company.2
The steps below are for an investment that needs no prior approval from the RBI, which is the usual case.
Before you start
Four checks decide whether the investment can be made at all.
- The business abroad. The rules do not allow investment in a foreign company engaged in real estate activity or gambling, or in one dealing in rupee-linked financial products without the RBI’s specific approval.1
- The amount. A company’s total commitment to all its companies abroad cannot exceed 400% of its net worth, taken from its last audited balance sheet.1 A commitment of more than USD 1 billion in one financial year needs the RBI’s prior approval.3
- The investor’s own record. An investor with a loan account classed as non-performing, or named as a wilful defaulter, or under investigation, first needs a no-objection certificate from the lender or agency concerned.3
- The price. Shares are bought or issued at an arm’s-length price, and the bank may ask for a valuation made by an internationally accepted method.1, 3
Step 1. Choose one bank
Everything to do with one overseas company goes through a single authorised dealer bank. Moving to another bank later needs a no-objection certificate from the first.3 Choose the bank you mean to stay with.
Step 2. Form FC and its papers
Form FC is the application. It goes to the bank with the supporting documents on or before the first investment.3
The Directions do not print one fixed list of documents. Each bank sets its own, under its own policy, which is why two banks ask for different things.3
Some papers are named in the Directions themselves, in the part on applications that need approval: a board resolution, a valuation certificate where one applies, and a chart of the group’s structure.3 Banks commonly ask for the same three on an ordinary application. They usually also ask for the last audited balance sheet, because the 400% limit is measured on it, and for the incorporation papers of the company abroad.
Step 3. The UIN
The bank checks the form and reports the investment to the RBI through its online system, and a UIN is allotted.3 The bank must have the UIN before it sends the money or before the shares are acquired, whichever comes first.2
The UIN is a registration number. The Directions state that allotting it is not an approval by the RBI.3 Staying within the rules remains the investor’s responsibility.
Step 4. The remittance
The bank remits against Form FC and Form A-2, its standard form for a payment abroad.3 The money goes through banking channels, and investment in cash is not permitted.2, 3
Every later remittance to the same company needs Form FC again, whether it is more share capital or a loan.3
Step 5. Proof within six months
The share certificate, or another document that proves the investment, goes to the bank within six months of the remittance. The bank keeps it on its file.2, 3
This step is easy to forget. By then the company abroad is running, and the bank file feels finished.
After the investment
- An Annual Performance Report for each overseas company, by 31 December. Where the overseas company’s year ends on 31 December, the report is due by 31 December of the next year.2
- The FLA return to the RBI, by 15 July.4
- A report within 30 days of receiving the proceeds, when the investment is sold.2
A report filed late can be put right by paying a late submission fee, within three years of its due date. Until that is done the investor cannot make any further commitment to the company.2
Leave time for it
Give the bank its papers well before the date the money is needed. A share purchase agreement that fixes a payment date should leave room for the UIN to arrive.
We prepare Form FC and the papers that go with it, and file the reports that follow. The dates are on our page about FEMA and RBI filings. A founder who plans to invest in their own name should first read LRS or ODI.
Sources
- Ministry of Finance, Foreign Exchange Management (Overseas Investment) Rules, 2022. Notification G.S.R. 646(E), 22 August 2022, as published by the Reserve Bank of India.
- Reserve Bank of India, Foreign Exchange Management (Overseas Investment) Regulations, 2022. Notification No. FEMA 400/2022-RB, 22 August 2022.
- Reserve Bank of India, Foreign Exchange Management (Overseas Investment) Directions, 2022. A.P. (DIR Series) Circular No. 12, 22 August 2022.
- Reserve Bank of India, FAQs on the Annual Return on Foreign Liabilities and Assets. Updated 1 July 2026.