ODI Filing in India for Investing in a UAE Company

ODI stands for Overseas Direct Investment. If you are an Indian resident and you put money into a UAE company, for example by subscribing to its shares, the investment is governed by Indian foreign exchange law as well as UAE company law. ODI filing is the Indian side of that: reporting the investment to the RBI through your bank.

This page covers the Indian filings. For the UAE side, read our guide to company setup in Dubai from India. Ofin Legal's UAE desk arranges the UAE company, and our Indian CA, CS and legal experts prepare the ODI documents, so one team works on both ends.

This page is general information. ODI treatment depends on your facts: who invests, how much, in what kind of entity and through which route. A qualified adviser should confirm the position before you remit money. To talk it through, message the UAE desk on WhatsApp at +971 50 523 5779 or use our contact page.

The Foreign Exchange Management (Overseas Investment) Rules and Regulations, 2022 apply to Indian residents who make overseas investments, whether in an overseas entity's equity or in other permitted forms. In practice, the person investing falls into one of two broad groups.

The LRS limit is a combined limit for all purposes in a financial year, so family travel, education and other remittances count against it as well. Whether an individual can hold a UAE company directly, and on what terms, depends on the facts. Ofin checks the route with you before any money moves.

The sequence below is typical. Details vary by bank and by the structure of the investment.

1. Confirm that the investment is permitted and which route applies to you.
2. Set up the UAE company and prepare its constitutional documents and share details.
3. Prepare the valuation and supporting documents your bank asks for.
4. Submit Form FC through your authorised dealer bank on the RBI's FIRMS portal.
5. Remit funds through the bank once it is satisfied with the documents.
6. File the Annual Performance Report every year and keep records of the investment.

You can run steps 1 and 2 together with our UAE business setup team, so the UAE company details match what the Indian filing says.

An authorised dealer bank is the Indian bank permitted to handle foreign exchange transactions. It is your first point of contact for ODI. Each bank has its own checklist, but the categories are similar.

• Identity, KYC and constitutional documents of the Indian investor
• A board resolution or similar approval for a corporate investor
• UAE company documents such as the licence, memorandum or articles of association and share certificate or details
• A valuation report where the rules require one for the investment
• Financial statements of the Indian investor and, where relevant, the UAE company
• Form FC and the supporting declarations

Documents issued in India and used in the UAE, or the other way round, may need attestation through the UAE Embassy chain. Our attestation guide explains the usual route. Ofin confirms the right route for each document before starting.

ODI does not end when the money is sent. The Indian investor must file an Annual Performance Report (APR) through the FIRMS portal by 31 December every year, based on the overseas entity's latest financial statements, for as long as the investment is held. The APR reports on the overseas entity's performance, based on its financial statements.

Other events can also need reporting, such as a change in shareholding, further investment, disinvestment or closure of the overseas entity. The rules specify what is reportable and the timelines. Ofin tracks these dates for clients it files for, but you should still keep the UAE company's accounts in order, because the APR depends on them.

Keep Indian compliance in step as well. A company investing abroad still has annual compliance in India to complete, and its auditors and tax advisers will need the ODI records.

Not every overseas investment is permitted. A resident individual can make ODI only in an operating foreign entity that is not in financial services and has no subsidiary or step-down subsidiary over which the individual has control. Entities have their own conditions. The rules also set conditions on the structure, such as how many layers of overseas entities are allowed and whether the Indian investor has an adequate track record.

If your UAE business is in a regulated area, such as financial services, ask before you incorporate, not after. Choosing the wrong activity on the UAE licence can create an Indian problem that is hard to reverse.

If you are a foreign-owned business investing in India instead, a different set of rules applies. Our FDI route checker is the place to start for that direction.

• Remitting money to the UAE before the bank has accepted the filing.
• Treating a personal remittance under LRS as if it were a company's ODI, or the reverse.
• Using the UAE company's name or share details in the Indian form that differ from the UAE documents.
• Missing the yearly APR because nobody owns the date.
• Forgetting to report a later change, such as additional investment or a change in shareholding.
• Starting the UAE setup first and discovering afterwards that the activity is restricted.
• Assuming a UAE tax position without checking, when UAE corporate tax may apply to the company.

Under Indian foreign exchange law, breaches can lead to compounding proceedings and penalties. The rules also allow a late submission fee when a return is filed after its due date; under the RBI's 2022 matrix it is a flat ₹7,500 for a late APR, and higher for transaction returns such as Form FC, depending on the amount and the delay. The amount and the conditions are set by the RBI and can change, so check the current rule or ask Ofin.

Filing late is usually cheaper and less stressful than not filing at all. If you have already invested in a UAE company without reporting, speak to an adviser early. Regularising a past investment depends on the facts and the timeline.

Ofin Legal arranges the UAE company through the UAE desk and prepares the Indian ODI documents through our CA, CS and legal team. That means the shareholder details, valuation inputs and attested documents are prepared once and used on both sides.

Next steps: send us your investor type, planned investment and UAE activity, and we will tell you which route and documents apply, and send a fixed written quote. Our Indian subsidiary and cross-border services page lists related work, and you can compare structures in the UAE cost calculator.

Talk to the UAE desk

Tell us your activity, where you live and how many visas you need. We reply with the right structure, the documents required and a fixed written quote, usually within 24 hours.

+971 50 523 5779 on call or WhatsApp