Section 16(1) in The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004
(1)A listed Indian Party, who has set up WOS abroad or have at least 51 per cent stake in an overseas JV, may write off capital (equity/preference shares) and other receivables, such as loans, royalty, technical know how fees and management fees in respect of the JV/WOS up to 25 per cent of the equity investment in the JV/WOS subject to condition that the Indian Party should submit the following documents for scrutiny along with the applications to the designated AD Category-I bank:(i)A certified copy of the balance sheet showing the loss in the overseas JV/WOS set up by the Indian Party; and(ii)Projections for next five years indicating benefit accruing to the Indian Party consequent to such write off/restructuring.
