In a bid to simplify and rationalize the regime for foreign investment in alternative investment funds (AIFs) and other investment vehicles and to promote the Indian investment management industry, the Reserve Bank of India (RBI) through a notification on 16 November has allowed foreign investments into AIFs and other investment vehicles under the automatic route. [ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3″ ihc_mb_template=”2″ ]The RBI has done this by amending the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Consequently, prior FIPB approval will not be required for AIFs and other investment vehicles for receiving foreign investment, except where the sponsor or manager of the AIF and other investment vehicle is not Indian “owned and controlled”.
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bangalore, Singapore, Silicon Valley and Munich. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
