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The Tax Publishers Limited Liability Partnership--FDI FDI in LLP in India CA. Deepak Harwani In the present article the learned author discusses about foreign direct investment in limited liability partnerships along with routes by which such FDI can be made, criteria, compliance and reporting. The LLPs are not eligible for foreign direct investment. 1. Introduction The Reserve Bank of India has allowed foreign direct investment in limited liability partnerships, which is an important advantage. Although foreign nationals and foreign Limited Liability Partnerships were permitted to become partners in LLPs under the LLP Act, 2008, foreign investment in LLPs was prohibited by the Foreign Exchange Management Act and its Regulations. As a result, a regulatory policy for permitting FDI had to be established. FDI is now permitted in limited liability partnerships as well. 2. Overview of FDI In LLP Due to its streamlined incorporation and maintenance processes, the Limited Liability Partnership model, established in India under the Limited Liability Partnership Act, 2008, has quickly become a popular corporate structure. LLPs provide an effective, less compliance-intensive alternative to corporations by combining the flexibility of a partnership with the benefits of a distinct legal entity and limited liability. Small and medium-sized businesses and professional service providers have been particularly drawn to this structure since it allows them to operate more independently while protecting personal assets. LLPs have become more well-known as a feasible vehicle for Foreign Direct Investment (FDI) due to the increased globalisation, an expanding Indian diaspora, and an increase in foreign interest in joining the Indian market. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Limited Liability Partnership--FDI

FDI in LLP in India

CA. Deepak Harwani

In the present article the learned author discusses about foreign direct investment in limited liability partnerships along with routes by which such FDI can be made, criteria, compliance and reporting. The LLPs are not eligible for foreign direct investment.

1. Introduction

The Reserve Bank of India has allowed foreign direct investment in limited liability partnerships, which is an important advantage. Although foreign nationals and foreign Limited Liability Partnerships were permitted to become partners in LLPs under the LLP Act, 2008, foreign investment in LLPs was prohibited by the Foreign Exchange Management Act and its Regulations. As a result, a regulatory policy for permitting FDI had to be established. FDI is now permitted in limited liability partnerships as well.

2. Overview of FDI In LLP

Due to its streamlined incorporation and maintenance processes, the Limited Liability Partnership model, established in India under the Limited Liability Partnership Act, 2008, has quickly become a popular corporate structure. LLPs provide an effective, less compliance-intensive alternative to corporations by combining the flexibility of a partnership with the benefits of a distinct legal entity and limited liability. Small and medium-sized businesses and professional service providers have been particularly drawn to this structure since it allows them to operate more independently while protecting personal assets. LLPs have become more well-known as a feasible vehicle for Foreign Direct Investment (FDI) due to the increased globalisation, an expanding Indian diaspora, and an increase in foreign interest in joining the Indian market.