Procedure for Repatriation of FDI Capital and Dividends from India

Repatriation Guidelines: Remitting Profits out of India

Foreign entities investing in India want to ensure they can repatriate their profits and capital back to their home country. Under FEMA and RBI regulations, repatriation is permitted subject to specified conditions.

1. Repatriation of Dividends

Dividends paid to foreign shareholders can be repatriated freely through authorized dealer banks. The company must ensure that the dividend is paid out of current profits, and pay the applicable withholding tax (tax deducted at source) under the Income Tax Act.

2. Repatriation of Capital Divestment

When a foreign investor sells their shares in an Indian company, the sale proceeds can be repatriated. The transaction must comply with RBI pricing guidelines (shares cannot be sold below fair market value) and pay capital gains tax in India before the funds are remitted.

Dinesh Prasad Tiwari & Associates represents foreign clients in managing capital repatriations, securing tax clearances, and filing reporting forms with the RBI.