Share on LinkedInShare on LinkedIn

ARTICLE · 28 OCTOBER 2026

When ESOPs Go Overseas: Navigating The ODI–OPI Framework Under FEMA

An ESOP granted by an overseas parent may begin as an employee incentive, but once the employee acquires securities in the foreign entity, the transaction enters the domain of India's overseas investment regime. The classification of such investment as OPI or ODI can have significant consequences for investment limits, reporting and compliance.

IndiaCorporate/Commercial Law

An ESOP granted by an overseas parent may begin as an employee incentive, but once the employee acquires securities in the foreign entity, the transaction enters the domain of India's overseas investment regime. The classification of such investment as OPI or ODI can have significant consequences for investment limits, reporting and compliance.

Regulatory Regime

The regulatory foundation for the concerned topic lays in the FEMA (Overseas Investment) Rules, 2022. The rules introduced by the Government of India on August 22, 2022, marked a significant reform in the regulatory framework governing overseas investments by persons resident in India. The new framework includes the Foreign Exchange Management (Overseas Investment) Rules, 2022, the Foreign Exchange Management (Overseas Investment) Regulations, 2022, and the Foreign Exchange Management (Overseas Investment) Directions, 2022.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See more popular content from