The
Reserve Bank’s Co-ordinated Direct Investment Survey (CDIS) and Co-ordinated
Portfolio Investment Survey(CPIS) are conducted under the auspices of the
International Monetary Fund (IMF), wherein information is collected from Indian
resident companies/ LLPs / Others [(include SEBI registered Alternative
Investment Funds (AIFs), Partnership Firms, Public Private Partnerships (PPP)]
on their foreign financial liabilities and assets position as at end-March of
the previous financial year (FY) and end-March of the latest FY. This
information is also used in the compilation of India’s Balance of Payments
(BoP) and International Investment Position (IIP).
Confidentiality
Clause: The company-wise information so provided will be kept confidential and
only consolidated aggregates will be released by the Reserve Bank.
What is
meant by “Residence of Enterprises”?
Ans: An
enterprise is said to have a centre of economic interest and to be a resident
unit of a country (economic territory) when the enterprise is engaged in a
significant amount of production of goods and/or services in that centre or
when it owns land or buildings located in that centre. The enterprise must
maintain at least one production establishment in the country and must plan to
operate the establishment indefinitely or over a long period of time.
What is Direct investment?
Ans: Direct investment is a category of
international investment in which a resident entity in one economy [Direct
Investor (DI)] acquires a lasting interest in an enterprise resident in another
economy [Direct Investment Enterprise (DIE)]. It consists of two components, viz.,
Equity Capital and Other Capital.
What is
meant by “Equity Capital under Direct Investment”?
Ans: It covers
(1) foreign equity in branches and all shares (except non-participating
preference shares) in subsidiaries and associates; (2) contributions such as
the provision of machinery, land & building(s) by a direct investor to a
DIE by equity participation; (3) acquisition of shares by a DIE in its direct
investor company, termed as reverse investment (i.e. claims on DI).
What is “Other
Capital under Direct Investment”?
Ans: The other capital component (receivables and payables, except equity
and participating preference shares investment) of direct investment covers the
outstanding liabilities or claims arising due to borrowing and lending of
funds, investment in debt securities, trade credits, financial leasing, share
application money etc., between direct investors and DIEs and between two DIEs
that share the same direct Investor. Non-participating preference shares owned
by the direct investor are treated as debt securities & should be included
in ‘other capital’.
Identification of the Indian company (Item 9,
Section-I).
What are
definitions of “Foreign Subsidiary”, “Foreign Associate” and “Special Purpose
Vehicle”
Ans:
Foreign Subsidiary:
An Indian company is called as a Foreign
Subsidiary if a non-resident investor owns more than 50% of the voting
power/equity capital OR Where a non-resident investor and its subsidiary(s)
combined own more than 50% of the voting power/equity capital of an Indian
enterprise.
Foreign Associate:
An Indian company is called as Foreign
Associate if non-resident investor owns at least 10% and no more than 50% of
the voting power/equity capital OR Where non-resident investor and its
subsidiary(s) combined own at least 10% but no more than 50% of the voting
power/equity capital of an Indian enterprise.
Special Purpose Vehicle:
A special purpose Vehicle (SPV) is a legal
entity (usually a limited company of some type or, sometimes, a limited
partnership) created to fulfil narrow, specific or temporary objectives. SPV
have little or no employment, or operations, or physical presence in the
jurisdiction in which they are created by their parent enterprises, which are
typically located in other jurisdictions (economies). They are often used as
devices to raise capital or to hold assets and liabilities and usually do not
undertake significant production.
