![]() The sponsor could be an unregulated investment company of a conglomerate. "If the asset management company of a local mutual fund sponsors an AIF in GIFT, it may not have to approach the RBI as most of these conditions are likely to be met. ![]() Under these rules - as per regulation 7 of overseas direct investment (ODI) rules-the investor is required to have earned net profit during the preceding three financial years from the financial services activities, registered with an Indian financial services regulatory authority of India and met necessary capital adequacy norms, among other things. A sponsor that fails to fulfil certain rules has to take RBI's permission before going ahead with the investment for fund formation. Since IFSC is treated as 'foreign territory' from exchange control perspectives, capital infusion for setting up a fund in the IFSC is considered as 'outbound investment' for floating an offshore financial services subsidiary.
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