Foreign Direct Investment (FDI) in LLPs

• FDI is allowed in LLPs under the automatic route in permitted sectors

• Sector must allow 100% FDI and have no performance-linked conditions

• Investment must be made by way of capital contribution or profit share

• LLPs cannot raise foreign investment in prohibited or restricted sectors

• Valuation of capital contribution must follow internationally accepted norms

Reporting and Compliance

• LLPs receiving FDI must file Form FLLP on RBI FIRMS portal

• Reporting must be done within 30 days of receiving the investment

• Annual return on Foreign Liabilities and Assets (FLA) must be filed by July 15

• All foreign transactions must be routed through an Authorized Dealer (AD) bank

• Non-reporting or delay attracts penalties under FEMA provisions

Outbound Investment by LLPs

• LLPs can invest outside India (ODI) in equity shares or JV/WOS subject to FEMA

• Must follow ODI norms under Liberalized Remittance Scheme (LRS) or automatic route

• Investment is subject to sectoral caps and compliance with host country laws

• AD banks must approve and record outward remittances with proper documents

• Annual performance reports must be submitted to RBI post-investment

Cross-Border Transactions

• Payments and receipts in foreign currency must comply with FEMA guidelines

• LLPs must use approved purpose codes for international transactions

• All forex deals must be declared to AD banks for compliance and tracking

• Export proceeds must be realized within prescribed timelines under RBI norms

• Foreign loans, if taken, must be under External Commercial Borrowing (ECB) norms

Restrictions and Prohibited Activities

• LLPs cannot accept foreign investment in activities requiring industrial licensing

• FDI is not allowed in agricultural or real estate business through LLPs

• LLPs cannot issue debt instruments or raise public deposits

• Use of foreign funds must match declared business objectives and agreements

• Non-compliance can lead to FEMA violations and RBI enforcement action