International Tax
ODI (Overseas Direct Investment) — Meaning
Investment by Indian residents in foreign entities, governed by the Overseas Investment Rules, 2022.
What is ODI (Overseas Direct Investment)?
Overseas Direct Investment covers Indian companies and individuals investing in the equity of foreign entities — subsidiaries, joint ventures or startups abroad. Under the FEMA Overseas Investment Rules and Regulations, 2022, most ODI is under the automatic route within limits (for companies, linked to net worth), reported through the authorised dealer bank, followed by an Annual Performance Report. Setting up a US LLC, UK company or UAE entity from India is ODI.
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More International Tax terms
NRI (Non-Resident Indian)
An Indian citizen residing outside India for more than 182 days in a financial year.
RNOR (Resident But Not Ordinarily Resident)
A transitional residency status for individuals who have recently returned to India after being NRIs.
DTAA (Double Taxation Avoidance Agreement)
Bilateral treaty between India and another country preventing the same income from being taxed twice.
FEMA (Foreign Exchange Management Act)
Indian law governing foreign exchange transactions, cross-border investments and NRI account operations.
LRS (Liberalised Remittance Scheme)
RBI scheme allowing resident individuals to remit up to USD 250,000 per year abroad for permitted purposes.
