What is FII and its role in the indian economy
There are two broad ways in which the foreign institutional investors may enter the Indian financial market - as an incorporated entity or an unincorporated Entity. Foreign investing firms entering as incorporated entities need to abide by certain rules. They need to enter as a company as per the Companies Act,1956.
The incorporation can occur either through joint ventures or as wholly owned subsidiaries . Foreign equity investment in these companies can reach up to 100%. Investment is subject to the set equity caps as directed by the Foreign Direct Investment Policy of India.
As an Unincorporated Entity, a foreign investment company can operate through its Liaison Office, Branch Office or Project Office. Investment activities undertaken by these offices need to be under India's Foreign Exchange Management Regulations,2000.
A resurgent India with opportunities galore has attracted Foreign Institutional Investment in an increasing amount. Foreign ...more