Government notifies amended forex rules for startups

22 November 2024

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India has notified the amended International Alternate Administration Laws 2024, to simplify authorised sellers to permit opening of overseas forex financial institution accounts of recognised start-ups. The amendments had been made after the definition of startups was modified to incorporate entities as much as 10 years from 5 earlier from the date of incorporation with the next turnover threshold of Rs 100 crore as in opposition to Rs 25 crore earlier.

There are round 1.5 lakh startups registered with the Division for Promotion of Trade and Inner Commerce (DPIIT).

“The latest modification to FEM (International Forex Accounts by a Particular person Resident in India) Laws is consistent with the trouble to harmonise the definition of startup as per the newest notification issued by DPIIT,” mentioned Mayank Arora, Regulatory Director, Nangia Andersen India.

The International Alternate Administration (Deposit) (Fourth Modification) Laws, 2024, issued by the RBI, launched a brand new provision which permits authorised sellers in India to allow non-resident people to open and keep interest-bearing accounts in Indian Rupees or overseas forex. Additionally, Finances 2024-25 had introduced harmonising the definition of ‘startup’ for ease of doing enterprise.

Arora mentioned that this is able to take away ambiguity amongst AD banks whereas permitting opening of overseas forex financial institution accounts of DPIIT recognised startups.