What is Overseas Corporate Body OCB?
Overseas corporate bodies refer to a company, partnership concern, trust or other corporate body located overseas but is owned by the individuals of Indian nationality up to 60%. It can also be owned by individuals residing outside India but who are of Indian nationality. The ownership of overseas corporate body by these individuals must be at least 60%.
OCB Investment
Overseas corporate bodies are also known as OCBs. During the early years of 1990s, special concessions and privileges were given to OCBs to carry out their business operations in India. It is estimated that nearly 600 OCBs hold investments in India. However, it is not possible to quantify the size of the investments of OCBs individually. The reason is that their investment is combined with that of non-resident Indians (NRIs). The investments of both of these concerns is treated as a group and then quantified.
Let us know more about the overseas corporate bodies.
Funds of Overseas Corporate Body
In this group investment, substantial amount of money is held by the non-resident Indians (NRI’s). Major portion of the funds is received through foreign direct investments and is passed by non-resident Indians with the assistance of overseas corporate bodies. It is to be noted that overseas corporate bodies are not regulated with SEBI, the Securities and Exchange Board of India. They also do not have to register themselves with SEBI. The regulatory framework of Reserve Bank of India also does not impose any restrictions on the working of overseas body corporate. Though it is advantageous for the overseas corporate body to run their business operations efficiently, but it can pose a matter of concern for the investors. If you are looking out for investing in overseas corporate bodies, then you have to keep in mind its terms and conditions governing investment, and their set of rules.
Things to consider about Overseas Corporate Body
The ownership in the overseas corporate body must be held by the individuals themselves, and not by the nominees. For example, if a nominee considers himself as the investor of the overseas corporate body, then it is not permissible by the regulations. The investor himself only claims to be the owner of the investment in OCB.
If the ownership in any OCB is held by non-resident Indians and is more than 60%, then certain documents are required to be furnished by the concern: Certificate in the form OAC from overseas auditor, chartered accountant or a certified public accountant stating the ownership details.
The overseas corporate bodies receive special concessions only if it satisfies the condition: The ownership is held by NRIs and is at least 60%. The OCBs are assigned with various facilities such as opening of bank accounts, deposits, repatriation facility, investment policies, remittance services, investment in immovable property, and taxation privileges. Some of the benefits granted to NRIs are not given to OCBs.
Conclusively, overseas corporate bodies are assigned with special concessions. But these are integrated in the class of non-resident Indians and not treated as a separate class.
Recommended Read :
- Who is a NRI?
- Who is Not An NRI?
- Banking Facilities for An NRI
- Who is a Person of Indian Origin PIO?
- How to Open Fixed Deposits for NRI?
- Home Loan for NRI
- What is An NRE Account?
- What is NRO Account?
- What is FCNR Account?
- Who is a OCI Overseas Citizen of India?
- Overseas Corporate Body - OCB Investment
This article sheds light on what an OCB is and how is it formed. This is a body which is owned by Indians who do not reside in India (at least 60 % of the share are owned by Indians). However, there are no Indian Government organisations who overlook the operations of these OCBs, this can be of concern for investors. But, if a careful study of the OCB is done, then one can surely invest their money .
May be OCB is majorly controlled by non-resident Indians and government has little or almost or no control on them. So an individual might think that it is not very safe to invest in an OCB, but that is not the case because there are numerous OCBs which are operating with complete integrity. Just have a look at their rating before you invest in an OCB.
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin residing outside india. The other corporate bodies are owned, directly or indirectly, to the extent of at least 60% by individuals of Indian nationality or origin residing outside India as also overseas trusts in which at least 60% of the beneficial interest is irrevocably held by such persons.
Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be at least 60%.