January 24, 2016 Leave a comment
Today if you have an idea and a business plan, there is probably some or other way to raise money for it somewhere or the other in the world. The offshore sources from which startups in India are raising funds include individuals, private equity players and crowdsourcing
Cross-border transactions of resident Indians are subject to the regulatory regime provided by the Foreign Exchange Management Act, 1999 and businesses are supposed to know the law before raising capital. However ,the government observed that many of the startups are being promoted by very young and inexperienced individuals. Moreover, the amount raised by some of them run into only a few lakhs, making it difficult for them to hire law firms to ensure that they comply with FEMA.
So the RBI has now set up a dedicated helpline for advice on cross-border remittances which are subject to guidelines issued under the Foreign Exchange Management Act.The helpline is actually an email ID (email@example.com) through which the RBI will respond to queries and offer guidance/assistance to start-ups for undertaking cross-border transactions within the ambit of the regulatory framework.While seeking guidance, start-ups have to provide complete information to the RBI and mention the specific issues on which they need guidance in relation to the Foreign Exchange Management regulations so that the personnel attending the helpline can offer timely and effective information.