Trading Derivatives in USA from India


#43

Are you sure about this???. Can you point me to relevant sections of FEMA. Who knows India could be giving whole new meaning to word “Resident”

BTW Body corporates are not an office, branch or agency. they are legal entities


#44

Hi TraderVenk,

here it is:
https://indiankanoon.org/doc/158543604/

please also clarifty this part " an association of persons or a body of individuals, whether incorporated or not, "

I was also going through the Overseas Direct Investment procedure, to get an idea about the setting up company route, and it appears that we required a approval from RBI to carry out any transaction that falls in finacial services category. ( https://m.rbi.org.in/Scripts/FAQView.aspx?Id=32#_Toc453240633 )

I am not sure of trading can be a financial services activity , but one of the statements says

"Trading in Commodities Exchanges overseas and setting up of JV / WOS for trading in Overseas Commodities Exchanges will be reckoned as financial services activity and will require clearance from Securities and Exchange Board of India (SEBI) on account of merger of Forward Markets Commission with SEBI."

Only a company already engaged in financial services in India and has showed net profit for last 3 years is allowed to operate in any financial services activity outside india.

I am not an expert in these complex legal stuff, I am sure there are many people here who have already researched on this topic, I would request you to share an opinion on this matter.


#45

I think u r getting confused with lot if thinks here.
A. A body corporate incorporated by an individual outside india is not a association /body of individuals residing in India
B. A JV or WOS is formed by Indian party not Indian resident. (Wht is the difference chk with RBI site) Indian resident incorporates a private company of LLC LLP which is a seperate legal entity and resident of host country.
C. Trading on your own account is not a financial service you r offering to anyone.

I think if u r interested u need to approach some company formation agents

Capital account transaction allowed under LRS scheme. Taken from RBI master circular

. The permissible capital account transactions by an individual under LRS are:

opening of foreign currency account abroad with a bank;

purchase of property abroad;

making investments abroad- acquisition and holding shares of both listed and unlisted overseas company or debt instruments; 5acquisition of qualification shares of an overseas company for holding the post of Director; acquisition of shares of a foreign company towards professional services rendered or in lieu of Director’s remuneration; investment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes;
setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013) outside India for bonafide business subject to the terms & conditions stipulated in Notification No FEMA.263/ RB-2013 dated March 5, 2013;

extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 20136 .


#46

Hey Thanks a lot for your response , I will check as you said.


#47

“An office, branch or agency” of what? They probably mean an office branch or agency of a company registered in India. This company will be registered in a different country, all the audits will happen in that country, Indian government probably does not have the right to ask for the audited reports. All they can ask about is the shares I own of the company and dividends received.

These are just my interpretations, need to dig in further. But considering everything, it should be possible to trade via this route as far as my understanding goes, but it’s good to be completely clear before initiating.


#48

money from India using LRS shouldn’t be used. Money/Salary in netherlands can be used for european markets I guess no issues. Check local law applicability


#49

We can file a tactical RTI and get this clarified from big Boss RBI. In future if in troubled waters RTI shall provide immunity