ODI — Overseas Direct Investment Compliance | Savlana Init

FEMA Compliance · Outbound Investment

Overseas Direct Investment — Structured. Reported. Compliant.

Indian companies and residents investing abroad must comply with RBI's ODI framework — Form ODI filing, annual performance reporting, and end-use conditions — we manage your complete outbound investment compliance under FEMA.

Overseas Direct Investment (ODI) refers to investment made by Indian entities — companies, LLPs, firms, and resident individuals — in foreign entities through equity, loans, or guarantees. ODI is permitted under the Foreign Exchange Management (Overseas Investment) Rules, 2022 and the associated RBI directions, which replaced the earlier ODI framework with a more comprehensive and structured regime effective August 2022.

The ODI framework distinguishes between Overseas Direct Investment (equity exceeding 10% in a foreign entity, or investment with control) and Overseas Portfolio Investment (equity below 10% without control). Each has distinct filing requirements, limits, and conditions. ODI by Indian entities is permitted up to 400% of net worth under the automatic route, subject to conditions including no investment in loss-making entities and compliance with sectoral restrictions.

All ODI transactions must be reported to the RBI through the FIRMS portal via the reporting entity's Authorised Dealer bank. The reporting includes the initial investment report, subsequent capital flows, and — critically — an Annual Performance Report (APR) for each foreign entity in which ODI has been made. Non-filing of the APR is one of the most common FEMA violations by Indian companies with overseas subsidiaries. We manage the complete ODI compliance lifecycle — from structuring the investment to filing the APR every year.

Our ODI (Overseas Direct Investment) Services

ODI Transaction Structuring

Advisory on structuring the outbound investment — equity vs loan vs guarantee, automatic vs approval route, pricing norms, and entity selection in the destination country.

Form ODI Filing

Filing of Form ODI (Part I) on the RBI FIRMS portal through the AD bank for the initial overseas investment — equity, loan, or guarantee extended to a foreign entity.

Annual Performance Report (APR)

Preparation and filing of the Annual Performance Report (Form ODI Part II) for each overseas entity in which ODI has been made — mandatory by December 31 every year.

Subsequent Remittance Reporting

Filing of Form ODI for subsequent capital flows to the overseas entity — additional equity, fresh loans, and guarantee extensions.

Disinvestment Reporting

Reporting of disinvestment from overseas entities through closure, sale of shares, or wind-up — with repatriation of sale proceeds and Form ODI filing.

FEMA Compliance Review

Review of existing overseas investments for FEMA compliance — APR filing status, end-use conditions, and reporting gaps.

Compounding for ODI Violations

Preparation and filing of compounding applications for non-filing of APR, late ODI reporting, and other ODI-related FEMA contraventions.

Overseas Investment Advisory

Comprehensive advisory on the Overseas Investment Rules 2022 — eligible investors, permitted activities, financial commitments, and repatriation requirements.

Our Process

Investment Review

We review the proposed ODI transaction — the Indian investor, the foreign entity, the investment instrument, and the destination country — to assess FEMA eligibility and route.

Form ODI Preparation

Form ODI (Part I) is prepared with the transaction details, foreign entity KYC, and supporting documents for the AD bank submission.

AD Bank Coordination & FIRMS Filing

The Form ODI is submitted through the AD bank and filed on the RBI FIRMS portal. We track and secure the UIN (Unique Identification Number) assigned to the ODI.

Annual APR Filing

Every year by December 31, we prepare and file the Annual Performance Report (Form ODI Part II) based on the audited accounts of the overseas entity.

Ongoing Monitoring

We maintain a compliance calendar for subsequent ODI filings, APR deadlines, and disinvestment reporting as the overseas investment evolves.

Why It Matters

✓Form ODI filed on FIRMS portal within the prescribed deadline through AD bank

✓Annual Performance Report (APR) filed by December 31 every year

✓ODI transaction structured for FEMA eligibility and automatic route conditions

✓Subsequent remittances and loan extensions reported promptly

✓Disinvestment and repatriation of overseas proceeds managed and reported

✓FEMA compliance audit of existing ODI positions — gaps identified and remedied

✓Compounding applications filed for missed APR and late ODI filings

✓Overseas Investment Rules 2022 advisory for new and restructured investments

Frequently Asked Questions

ODI is investment by an Indian entity or resident in a foreign entity where the Indian party acquires more than 10% equity or exercises control. It includes equity, loans, and guarantees extended to a foreign entity. ODI is governed by the Foreign Exchange Management (Overseas Investment) Rules, 2022 and RBI directions.

Indian companies, LLPs, registered partnership firms, and resident individuals can make ODI under FEMA. The eligible investor must be a person resident in India as defined under FEMA. Certain entities — those in default to banks or under investigation — are not eligible.

Indian entities can invest in overseas entities up to 400% of their net worth under the automatic route. Resident individuals can invest up to USD 250,000 per year under the Liberalised Remittance Scheme (LRS), which also covers ODI.

The Annual Performance Report (Form ODI Part II) is a mandatory annual filing with the RBI for every overseas entity in which an Indian entity has made ODI. It must be filed by December 31 each year, based on the audited accounts of the overseas entity as at the end of its financial year.

Non-filing of the Annual Performance Report is one of the most common FEMA violations. It is a contravention of the ODI regulations and can attract penalties up to three times the amount of ODI. Compounding is available at the RBI upon voluntary disclosure.

Under the Overseas Investment Rules 2022, Indian entities cannot make ODI in a foreign entity that has accumulated losses or whose net worth is negative. This is a key eligibility condition that must be verified before each tranche of investment.

Need to file Form ODI or your Annual Performance Report for overseas investments?

We structure the investment, file Form ODI on FIRMS, and file the Annual Performance Report every December — complete ODI compliance for your overseas subsidiaries and investments.