Allowing FDI in LLPs to help ease of doing business: Deloitte

MUMBAI: The government’s recent decision to allow foreign direct investment ( FDI) in limited liability partnerships (LLP) is set to improve ease of doing business, according to a research report by Deloitte.

Reserve Bank of India (RBI) has, on 3 March 2017, notified Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2017 (FEMA Amendment Regulations), the report said.

“The amendments would facilitate ease of doing business in India. It gives much clarity on conversion of a company with FDI into a LLP under automatic route. LLP can now access ECBs subject to further amendments being made in ECB framework,” it added.

The amendments takes into account the changes earlier introduced by the Government of India in FDI Policy for investment in LLP by person resident outside India. “FEMA Amendment Regulations have substituted Schedule 9 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000 (FEMA Regulations) titled FDI in LLPs formed and registered under the Limited Liability Partnership Act, 2008,” according to the report.