FDI & FEMA Compliance for Korean Investors in India

When a Korean company invests in an Indian entity, the investment is governed by India's Foreign Exchange Management Act (FEMA) and FDI policy. Getting the reporting right avoids penalties that can reach several times the amount involved.

Automatic vs Government Route

• Automatic route: No prior approval needed — covers most sectors and is how the majority of Korean investment enters.
• Government route: Prior approval from the relevant ministry required for sensitive sectors (defence, certain media, etc.).

Key Filings

• FC-GPR: Report the issue of shares to the Korean investor within 30 days of allotment.
• FC-TRS: Report any transfer of shares between residents and non-residents.
• FLA Return: Annual return of foreign assets and liabilities to the RBI by 15 July.

Pricing Guidelines

Shares issued to or transferred with a foreign investor must respect FEMA pricing guidelines — typically a valuation floor for issue and a ceiling on transfers to non-residents — supported by a valuation report.

Ongoing Obligations

Beyond entry, Korean-owned entities carry annual FLA returns, transfer-pricing documentation for related-party dealings, and correct routing of any further capital.

Statura manages end-to-end FDI/FEMA compliance and RBI filings for Korean investors.