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The Parliament of India “to merge and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”. It was passed in the winter session of Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA). This act makes offences related to foreign exchange civil offenses. It extends to the whole of India replacing FERA, which had become incompatible with the pro-liberalization policies of the Government of India. It enabled a new foreign exchange management regime consistent with the emerging framework of the World Trade Organization (WTO). It also flagged the way for the introduction of the Prevention of Money Laundering Act, 2002, which came into effect from 1 July 2005.

FEMA served to make transactions for external trade and easier, transactions involving current account for external trade no longer required RBI’s permission. The deals in Foreign Exchange were to be ‘managed’ instead of ‘regulated’. The switch to FEMA shows the change on the part of the government in terms of for the capital.The FEMA head-office, also known as Enforcement Directorate is situated in New Delhi and is headed by a Director. The Directorate is further divided into 5 zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar and each office is headed by a Deputy Director. Each zone is further divided into 7 sub-zonal offices headed by the Assistant Directors and 5 field units headed by Chief Enforcement Officers.

Nature of Dispute

  • Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted.
  • Work beyond the restrictions imposed by the Government.
  • Without general or specific permission of the MA restricts the transactions involving foreign exchange or foreign security and payments from outside the country to India.
  • The transactions should be made only through an authorized person.
  • Deals in foreign exchange under the current account by an authorized person can be restricted by the Central Government, based on public interest generally.
  • Selling or drawing of foreign exchange is done through authorized persons.
  • The RBI is empowered by this Act to subject the capital account transactions to a number of restrictions.
  • Residents of India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold immovable property abroad if the currency, security, or property was owned or acquired when he/she was living outside India, or when it was inherited by him/her from someone living outside India.


Our Services

Preach Law Services are as follows:

  • To transactions involving in Foreign Exchange Management Services.
  • To interpretation of Foreign Exchange Management Act, Rules, Regulations, Master circulars and other allied Acts.
  • To Double Taxation Avoidance Agreements (DTA).
  • To transfer pricing.
  • To take approvals, preparation of necessary forms and documents and filing with the prescribed time before an authority.
  • Follow up with the appropriate authority for getting the approvals done.
  • Filing of Intimations with Reserve Bank of India and various Statutory Forms & Returns with Reserve Bank of India.
  • Preparation of statutory registers and records for foreign exchange transactions.
  • Compliance (FDI, ODI, Export, Import etc.) and Audit of the records and documents maintained as per statutory requirements of the adjudicating authorities.
  • Legal opinion for the agreements, transactions and drafting/vetting of commercial agreements.
  • Drafting of applications for loan facilities, approval services, seeking certificates from the International taxation department for non/lower deduction of tax at source.
  • Issuing Foreign Remittance Certificates, Issuing share valuation certificates for foreign investment in India, Issuing certificates related to compliance of withholding tax requirements for remittance outside India, Issuing certificates required at the time of repatriation outside India and other documentation and remittance support and dealing with authorized dealers in connection with foreign remittance.