Cross-Border Transactions & FEMA Reforms: Merger Alignment, ODI Scrutiny, New AP Regulations
Key Questions
How has RBI harmonized FEMA with the MCA regime for cross-border mergers?
RBI has aligned FEMA provisions for cross-border mergers with the MCA regime effective June 5, 2026, simplifying both inbound and outbound merger processes. This harmonization reduces regulatory overlaps and supports smoother deal structuring in transactional practice.
What are the key updates in the new FEMA (Authorised Persons) Regulations, 2026?
The RBI issued new FEMA (Authorised Persons) Regulations, 2026, which replace the 2000 framework and directly affect foreign exchange dealings and compliance. These changes are relevant for FEMA advisory and entities involved in cross-border transactions.
Why is RBI maintaining scrutiny on overseas investments under the 2022 OI Regulations?
RBI continues tight oversight amid $27B outflows in FY24-26, applying a $1B threshold and 4x net worth cap. This scrutiny impacts compliance and structuring for overseas direct investments.
RBI has harmonized FEMA for cross-border mergers with MCA regime (June 5, 2026), simplifying inbound/outbound mergers. Separately, RBI issued new FEMA (Authorised Persons) Regulations, 2026, replacing the 2000 framework, directly impacting foreign exchange dealings and compliance. Meanwhile, RBI continues tight scrutiny of overseas investments amid $27B outflows FY24-26, with $1B threshold and 4x net worth cap under 2022 OI Regulations. These developments are critical for transactional practice, FEMA advisory, and deal structuring.