ODI Compliance for Indian Companies

What is ODI compliance? Overseas Direct Investment (ODI) compliance covers all regulatory requirements when an Indian company invests in a foreign entity — whether as a Joint Venture (JV), Wholly Owned Subsidiary (WOS), or step-down subsidiary. Governed by the Foreign Exchange Management (Overseas Investment) Rules, 2022, and RBI Master Direction on Overseas Investment, 2022. Virtual Auditor provides end-to-end ODI advisory including structuring, reporting, annual performance reporting (APR), and disinvestment compliance. Quick Answer: ODI Compliance for Indian Companies — Overseas Direct Investment (ODI) compliance. ODI reporting, APR filing, step-down subsidiary structuring, disinvestment compliance under RBI's 2022 Rules.

Key ODI Requirements

Regulatory basis: Foreign Exchange Management (Overseas Investment) Rules, 2022 read with FEMA (OI) Regulations, 2022 and RBI Master Direction on Overseas Investment dated August 22, 2022.

Automatic route: Indian companies can invest up to 400% of their net worth under the automatic route in any bona fide activity abroad (except real estate and banking without RBI approval). Investment in financial services requires prior RBI approval.

Reporting: Form ODI (via FIRMS portal through AD bank) within 30 days of investment. Annual Performance Report (APR) by December 31 each year. Evidence of investment (share certificates, investment proof) must be submitted within 6 months.

Step-down subsidiaries: Indian entity investing through an overseas JV/WOS into a further subsidiary. Requires compliance with both ODI Rules and the host country's investment regulations.

Overseas Investment — ODI vs PI

Step-by-Step Process

Step 1

Check eligibility under OI Rules 2022

Step 2

Obtain board resolution for overseas investment

Step 3

File Form ODI with AD bank

Step 4

Remit investment amount through AD bank

Step 5

Annual Performance Report by December 31

Step 6

Report disinvestment within 30 days

What You Will Receive

Upon completion, you will receive: ODI compliance assessment report, filed Form ODI (Part I/II) with AD bank, Annual Performance Report (APR) for each overseas entity, FEMA compliance certificate, investment flow chart documenting the entire overseas investment structure, and ongoing compliance calendar covering APR deadlines, material event reporting triggers, and disinvestment/winding-up reporting requirements.

Updated for FY 2025-26

This service page reflects the latest regulatory requirements as of March 2026, incorporating changes from the Union Budget 2025, recent MCA notifications, CBDT/CBIC circulars, and RBI master directions applicable to odi compliance for indian companies. Virtual Auditor continuously monitors regulatory updates to ensure all advice and filings are current.

What has changed in the law — reviewed October 2026

• Income-tax Act, 2025: assented to on 21 August 2025 and in force from 1 April 2026, it replaces the Income-tax Act, 1961 for tax year 2026-27 onward, and the Income-tax Rules, 2026 (notified 20 March 2026) replace the 1962 Rules. Section and rule numbers on this page are those of the 1961 Act and 1962 Rules, which continue to govern assessments, appeals and pending proceedings for assessment years up to 2026-27; for tax year 2026-27 onward the corresponding provisions of the 2025 Act apply, and our engagement letters quote both.