Skip to main content
Indian Investment in UAE: ODI and LRS Compliance Rules
Back to Court News
Reserve Bank of India Circularcorporateforeign_exchangetax

Indian Investment in UAE: ODI and LRS Compliance Rules

October 15, 2026

Comprehensive compliance guide for Indian entities investing in UAE businesses under ODI and Liberalised Remittance Scheme. Covers valuation, funding, reporting and AD bank roles.

Compliance for Indian Investments in UAE

The establishment and acquisition of businesses in the UAE by Indian residents are governed by the Foreign Exchange Management (Overseas Direct Investment) Rules, 2022, and the Liberalised Remittance Scheme (LRS) under FEMA. Investments exceeding USD 250,000 per financial year per individual fall under ODI norms and require reporting through Authorised Dealer (AD) banks.

For corporate structures, valuation of target entities must be conducted by chartered accountants or merchant bankers. Funding must not stem from prohibited sources, and subsequent reporting obligations — including APR and FLA — apply. The LRS allows individuals to remit up to USD 250,000 annually for permissible capital account transactions, including setting up wholly-owned ventures.

Legal advisors must ensure structuring adheres to end-use restrictions and monitor evolving reporting requirements via the FIRMS portal. Non-compliance risks penalties under FEMA or scrutiny under PMLA.

Citations

  • FEMA (ODI) Rules, 2022
  • LRS Scheme, Master Direction 2015
Practice Areas:corporateforeign_exchangetax

Related Articles

View All →
Tax Classification Based on Form at Sale: Supreme CourtFeatured
Supreme Court of Indiataxcorporate

Tax Classification Based on Form at Sale: Supreme Court

The Supreme Court held that tax classification of goods must be determined by their physical form at the time of sale, not by the end-use or intended application by consumers.

Oct 14, 2026Read more →
Tax Classification Based on Form at Time of Sale, Not End Use: SCFeatured
Supreme Court of Indiataxcorporate

Tax Classification Based on Form at Time of Sale, Not End Use: SC

The Supreme Court held that tax classification of goods must be determined by their physical form at the time of sale, not by the buyer's ultimate use, clarifying long-standing confusion in tax jurisprudence.

Oct 12, 2026Read more →
SBI Liable for TDS on Foreign LTC BenefitsFeatured
Supreme Court of Indiataxlabour

SBI Liable for TDS on Foreign LTC Benefits

Supreme Court held that foreign-leg Leave Travel Concession (LTC) benefits are not exempt under Section 10(5) and SBI must deduct TDS on such reimbursements.

Oct 9, 2026Read more →