As per the provision of FEMA, any individual none resident people or corporation registered outside India can invest in India by way of acquisition transfer of profit shares in the capital structure of an LLP under FDI. However, there is some person who cannot make an investment or cannot contribute foreign capital in the Indian Economy those are:-
- Foreign Portfolio Investor or
- Foreign Institutional Investor or
- Foreign Venture Capital Investor registered in accordance with SEBI guideline
Apart from this a person or entity of other than a citizen of Pakistan or Bangladesh also barred under FDI.
An investment made under Foreign Direct Investment (FDI) in the capital or profit of limited liability partnership (LLP) is called FDI-LLP. You can make FDI in LLP who is registered as on the date of investment as per provision and proves mentioned under the LLP Act, 2008.
Eligible Investor under the FDI-LLP:-
- A Non-Resident individual person
- A foreign registered company
These are two types of investor who can contribute foreign capital in LLP-FDI
Contribution can be made by these two types of the investor by way of
- Capital contribution
- Acquisition / Transfer of profit shares in LLP
Eligible investment in LLP-FDI
The only contribution in the capital of LLP is an eligible investment under the LLP-FDI. And investment in profit of LLP is reinvestment not investment.
LLP Eligibility for LLP-FDI
To Receive Foreign Direct Investment LLP should meet the following criteria:-
- LLP should be in the business operation where 100 % FDI is allowed under the automatic route and there must not be any kind of FDI linked performance conditions.
- If Company or LLP has already received FDI and wishes to make the investment in the LLP can do so if the LLP receiving FDI operating in sectors/activities where 100% FDI via automatic route.
- FDI in LLP as per the provision of the LLP Act, 2008.
- The company who have received FDI and converted under the LLP are eligible to take FDI if he fulfills condition mentioned on point no 1
- FDI should be as per the pricing guideline under the FEMA Act.