Preeto Ltd. wants to make remittances 6% of investment brought into India. Does it need RBI approval?

(2) As per the Rules, Remittances exceeding five per cent of investment brought into India or USD 100,000 whichever is higher, by an entity in India by way of reimbursement of pre-incorporation expenses, shall require prior approval of the Reserve Bank of India. In the given case, for remittances of 6% of investment (in amount) brought into India, exceeding the 5% threshold or USD 100,000 (whichever is higher) prior RBI approval is mandatory. Note: The answer to the question is on the presumption that the remittance is by way of reimbursement of pre-incorporation expenses. It further depends on relative value of 6% of investments vis-à-vis USD 100,000. Accordingly, the answer may vary depending on presumption whether 6% of investments exceeds USD 100,000 or otherwise.