Key Points
The removal of the UAE from the FATF grey list opens up investment opportunities for UAE investors in India..
It strengthens FDI inflows, reduces KYC requirements for FPIs, clarifies investment acceptance for domestic AIFs, and benefits start-ups in accessing venture debt from UAE lenders.Agencies..
Indian finance companies scouting for foreign equity, startups hurt by funding winter, and private equity and venture capital funds wooing overseas investors would enjoy the spinoffs from the United Arab Emirates (UAE) shedding the stigma of being in the grey list of the global anti-money laundering watchdog...
The development would make it easier for UAE investors and lenders to bet on businesses in India as the regulatory dos and donts attached to inflows from FATF grey list countries would no longer be applicable..
According to Tejesh Chitlangi, joint managing partner, at IC Universal Legal, UAE has increasingly become a significant source of FDI inflows in India and the move will only further strengthen such flows due to reduced costs of bank KYCs, funding, greater overall confidence in the jurisdiction with Indian entities and increased inflows in sectors like NBFCs wherein till date UAE-based investors could not have exercised more than 20% of the voting rights or in other words significant influence due to RBI's restrictions applicable on FATF non-compliant jurisdictions..
