FEMA Updates & Opportunities: Liberalisation Sparks Growth

Key Changes Under FEMA (2025 Notifications)

1. Special Non-Resident Rupee (SNRR) Accounts Expanded

• NRIs can open/maintain SNRR accounts in India or abroad without the earlier 7-year cap

• Can use SNRR for both capital and current transactions with residents and PROIs. Ideal for long-term business tie-ups.

2. Repatriation & Convertible Notes Rework

• Foreign currency/rupee balances can now be used for forward foreign investment; proceeds flow freely back to the source account.

• Convertible Notes regime updated: ensures capital and exit flows align with INR repatriation norms.

3. Exporters Can Open Foreign Currency Accounts Abroad

• Exporters may now hold FCNR accounts abroad for receipts and payments—subject to repatriation timelines .

• Offers flexibility in forex management and import pay-outs.

📈 Business Benefits & Strategic Takeaways

• Long-Term NRI Partnerships: Ideal for projects needing extended collaboration beyond 7 years.

• Cross-Border Investments: Simplified currency flow encourages offshore funding & startup growth.

• Export Efficiency: Desa exporters can manage foreign receipts more fluidly while meeting regulatory timelines.

Recommendations for CAs & Clients

1. Review Existing NRI Client Accounts

   • Ensure optimal use of SNRR limits and compliance post-removal of the 7-year cap.

2. Advisory for Startups & Investors

   • Guide clients on structuring convertible instruments under updated repatriation guidelines.

3. Support Exporters with Forex Optimization

   • Leverage FCNR flexibility to streamline forex cash flow and reduce hedging costs.