2 Significant Relaxations That Directly Impact Carry and Co-Invest Structures for PE/VC Fund GPs/Employees

 Indian Residents Now Permitted to Invest Overseas with Regulatory Caveat

Indian residents are now allowed to invest in overseas registered funds with the primary condition being that the fund manager must be regulated. This marks a significant shift from the earlier stipulation, which required the investment vehicle itself to be regulated—a condition that did not align with the typical structure of funds. This relaxation facilitates smoother investment processes and broadens the scope for Indian investors in the global market.

Expanded Investment Instruments for Greater Flexibility and Tax Efficiency

Previously, investments were restricted to "units." However, the recent changes now permit investments in various instruments, including shares and other capital instruments. This development introduces greater flexibility in investment structures and opens up opportunities for enhanced tax efficiency. By allowing a broader range of investment instruments, fund managers and investors can tailor their investment strategies more effectively to meet their specific financial goals and regulatory requirements.