FDI up to 49% is also permitted in asset reconstruction companies.
In the Insurance sector FDI is allowed upto 26%.
Foreign direct investment up to 100% is permitted in NBFCs, which are undertaking 18 activities, viz., merchant banking, underwriting, portfolio management services, investment advisory services, financial consultancy, stock broking, asset management, venture capital, custodial services, factoring, credit rating agencies, leasing and finance, housing finance, forex broking, credit card business, money changing business micro credit and rural credit.
Currently the legislation limits the FDI participation to 26% for insurers and reinsurers. The minimum capital requirement for setting up an insurance company is Rs 1 bn (US$22.5 mn) and Rs 2 bn (US$45 mn) for a reinsurance company. The legislation also requires insurance companies to maintain a minimum solvency margin ratio of 150% or Rs 50 crs/Rs 100 crs for direct insurers/reinsurers respectively at all times. There are no restrictions to market access.
35. What are the criteria for choosing individuals or legal entities that are exempted from income tax? (Pages 10 11, paragraph 22)
