The Hindu : Business : Charitable trusts can invest overseas

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Saturday, Jun 28, 2008
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Charitable trusts can invest overseas

Only registered bodies are eligible

NEW DELHI: The Reserve Bank of India on Friday allowed charitable trusts and societies to invest in other countries through joint ventures and wholly-owned subsidiaries, a move that is likely to help hundreds of organisations to set up their branches abroad.

The move is also seen as an attempt by the RBI to deal with the flow of capital funds through liberalising the outflow of funds.

“It has been decided, in consultation with the Union Government, to allow registered trusts and societies engaged in manufacturing and the educational sector to make investment in the same sector(s) in a joint venture or wholly owned subsidiary outside India,” the RBI said in a notification.

To manage the forex reserves of over $300 billion, the central bank has already liberalised the flow of funds through companies and individuals.

Analysts said the decision was expected to open new opportunities for various religious and charitable trusts to expand their activities in other countries.

The RBI said only those registered societies and trusts, which are in existence for at least three years and fulfil other conditions, would be eligible to invest abroad after taking sanction from the central bank.

However, the organisations against which the Directorate of Enforcement or CBI is holding any investigation may not be allowed to invest abroad.

Notably, the Finance Ministry has already brought charitable trusts and societies engaged in commercial or trade activities under the tax net in the last budget. — PTI

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