What is the one thing you know about FEMA? It is hard to comprehend. FEMA, or the Foreign Regulations Management Act, is a crucial legislature formulated by the RBI and the adjoining Authorities to regulate foreign currency exchanges in the country. In this article, we are going to discuss some of the critical FEMA regulations relating to Forexs and how a FEMA consultant comes in handy to deal with the legal and financial proceedings while conducting your Business in the FOREX businesses. Let us now look at them one by one.

A permitted entity must not deal in or transfer foreign currencies or security to unauthorized persons. It must also not make any payment to or for the credit of any resident outside India. These entities must not receive otherwise through an authorized person, any payment by order, or on behalf of any resident outside India. Entering a permitted entity must not enter into any financial transaction in India. Such entities are considered associated with the acquisition, creation, or transfer of a right to acquire any asset outside India by any person.

Any permitted entity, as well as a resident in India, must not do any of the following with any foreign exchange, foreign security, or immovable property outside India:

• Acquisition of the Foreign Exchanges

• Holding Foreign Exchanges

• Owning Foreign Exchanges

• Possessing Foreign Exchanges

• Transferring Foreign Exchanges

Current Account

A permitted entity can sell or draw foreign exchange to or from an authorized person if such sale or withdrawal is a CAT or the Current Account Transaction. But the Central Government, in the public interest and consultation with the RBI, can impose reasonable restrictions on current account transactions.

Capital Account

Any permitted entity can sell or draw foreign exchange to or from an authorized person for a Capital Account Transaction. The RBI, in consultation with the Central Government, can specify

• Class(s) of permissible capital account transactions

• Limit up to which foreign exchange must be permissible for such transactions

• Or any other condition(s) which may be placed on such transactions

The Reserve Bank must not impose any restriction on the withdrawal of foreign exchange for payments due to the amortization of loans or not depreciation of direct investments in the ordinary course of Business.

Every exporter must furnish a declaration containing true and correct material particulars, which includes the amount representing the total export value. If the full export value of the goods is not ascertainable at the export time, the export value must be concerning the prevailing market conditions. This is in exception to reception on the sale of the goods in a market outside India.

Also, Every exporter must furnish such other information as required by the RBI to ensure the realization of the export proceeds. The RBI must ensure that the total export value of the goods it determines is received without delay. It can direct any exporter to comply with the requirements it deems necessary. In addition, they must have regard for the prevailing market conditions. The service exporter must also furnish a declaration containing the correct material about payment for such services