Up to 400%
General company limit
Of net worth as per the latest audited balance sheet, subject to the ODI framework and transaction conditions.
RBI regulatory support
Overseas Direct Investment (ODI) Compliance
Understand RBI’s ODI framework, financial commitment limits, eligibility conditions, AD bank process and annual reporting before investing outside India.
A practical guide to RBI ODI for Indian businesses
Overseas Direct Investment (ODI) is an investment by an eligible Indian entity in a foreign entity through equity, capital contribution or other permitted financial commitment. The RBI Overseas Investment Rules, Regulations and Directions, 2022 govern the transaction, alongside FEMA requirements and your Authorised Dealer (AD) bank’s review.
Core RBI limit
How much can an Indian company invest overseas?
For an Indian entity, the overall financial commitment under the automatic route is generally capped at 400% of its net worth as per its latest audited balance sheet. This is a combined limit, not only the equity amount.
Total commitment
What counts toward the limit
Equity, loans, corporate or performance guarantees, and qualifying pledges or charges can be included in the financial commitment calculation.
USD 250,000
Individual route
Resident individuals may use the Liberalised Remittance Scheme limit per financial year for eligible overseas investment, subject to separate conditions.
Existing company vs newly incorporated company
The RBI framework does not create a separate higher or lower ODI percentage merely because a company is old or new. The practical difference is usually the availability of audited financials, net worth and evidence supporting the overseas business plan.
Existing Indian company
A company with audited financial statements normally uses net worth shown in its latest audited balance sheet to assess the 400% financial commitment ceiling.
- Calculate the aggregate commitment against the latest audited net worth, including eligible guarantees and loans.
- Keep board approval, audited financials, funding trail, overseas entity documents and valuation support ready for the AD bank.
- Check existing overseas commitments, outstanding guarantees and annual reporting before making a fresh commitment.
Newly incorporated company
A new company should not assume it can use the 400% automatic-route calculation without an audited balance sheet establishing net worth.
- First confirm its audited financial position and proposed funding structure with the AD bank and RBI/FEMA adviser.
- A promoter’s personal capacity, another group company’s net worth or an informal projected valuation cannot simply replace the company’s own ODI eligibility calculation.
- Where a transaction does not comfortably fit the automatic route, specific RBI approval or a different compliant structure may need to be considered before any remittance.
Key automatic-route checks before you proceed
- The Indian entity should be eligible under the ODI framework and should not be a wilful defaulter, under RBI export caution restrictions, or facing disqualifying investigation or regulatory restrictions.
- The overseas entity should be engaged in a bona fide business activity. Investment in prohibited activities or structures requires careful review.
- The funding method must be permitted and clearly evidenced, such as eligible foreign exchange remittance, capitalisation where allowed, or another permitted route.
- The transaction value and share acquisition may require valuation support from an eligible valuer, depending on the transaction and applicable rules.
- All remittances and filings are generally routed through one designated AD bank for the overseas investment.
Transaction assessment
Review the proposed overseas investment, investor profile, target country and business purpose to identify the applicable ODI pathway.
Financial commitment review
Map equity, loans, guarantees and other commitments against the applicable net-worth limit before you remit funds.
AD bank documentation
Prepare a clear documentation pack and coordinate with your Authorised Dealer bank for the transaction review.
Reporting and ongoing compliance
Support reporting, annual performance reporting and record-keeping for your overseas investment.
How we support your ODI journey
Understand your plan
Share the overseas country, target entity, investment amount, ownership structure, funding source and timeline.
Check eligibility and limit
We review the latest audited net worth, existing commitments and transaction conditions before you proceed.
Prepare the filing pack
We help compile approvals, financial information, declarations, valuation support and overseas entity records.
Coordinate and report
We assist with the AD bank process and guide the post-investment reporting responsibilities.
Documents commonly required
- Indian entity incorporation and constitutional documents
- Board or partner approvals for the proposed overseas investment
- Latest audited financial statements and net-worth information
- Details of existing overseas investments, loans and guarantees
- Overseas entity incorporation, ownership, business activity and beneficial ownership records
- Transaction agreements, valuation support and funding details
- KYC and other documents requested by the Authorised Dealer bank
Frequently asked questions
What is the RBI ODI limit for an Indian company?
The general automatic-route ceiling is financial commitment up to 400% of the Indian entity’s net worth as per its latest audited balance sheet, subject to the ODI framework. The calculation can include equity, loans, guarantees and other qualifying commitments, so the available headroom should be checked transaction by transaction.
Can a new company make an overseas investment under ODI?
A newly incorporated company should first establish how it meets the ODI conditions with its Authorised Dealer bank. If there is no audited balance sheet establishing net worth, it should not assume the 400% automatic-route calculation is available. The transaction structure and any approval requirement need a specific review before funds are remitted.
Is the 400% ODI limit only for equity shares?
No. The limit is based on total financial commitment. Depending on the transaction, equity, loans, guarantees and qualifying pledges or charges can affect the calculation. The exact treatment should be confirmed before signing or remitting.
Do I need to work through an AD bank for ODI?
Yes. Overseas investment remittances and related reporting are generally routed through a designated Authorised Dealer bank. The bank reviews documents and may ask for additional information before processing the transaction.
What reporting applies after an ODI investment?
Post-investment obligations may include reporting relevant changes in the overseas entity and annual performance reporting. The requirements depend on your investment structure, and filings should be completed through the designated AD bank within the applicable timelines.
Can a resident individual invest in a foreign company?
A resident individual may be able to make eligible overseas investments under the Liberalised Remittance Scheme, currently subject to the overall USD 250,000 limit per financial year and other applicable conditions. This is separate from the 400% company financial commitment limit.
Discuss your overseas investment plan
Tell us about the target country, overseas entity, investment amount and funding plan. We will help you map the next ODI compliance steps.
Start an ODI Enquiry