FEMA is the Foreign Exchange Management Act, 1999 — India's law governing all cross-border money movement, administered by the Reserve Bank of India. It sets the rules for how Indian residents may receive, send, and hold foreign currency, including payments from overseas clients.
How does FEMA work?
FEMA replaced the older, stricter FERA regime, shifting India from foreign-exchange control to foreign-exchange management. Instead of treating cross-border transactions as suspect by default, FEMA permits them within a defined framework — most inbound and outbound flows are legal as long as they are routed through authorised channels and correctly classified.
Two pieces of that framework matter most to founders:
Purpose codes — every inbound foreign remittance must be tagged with an RBI purpose code (for example, P0802 for software services or P1006 for professional and consultancy services) so the central bank can see why the money arrived.
The Liberalised Remittance Scheme (LRS) — resident individuals may remit up to USD 250,000 per financial year abroad for permitted current and capital account transactions.
Why does FEMA matter for a global founder?
If you are an Indian resident getting paid by US clients — in USD or in stablecoins like USDC — FEMA is what decides whether that money lands cleanly. The compliance risk is rarely the work itself; it is receiving foreign value through an informal or direct-wallet route that never gets a purpose code or a paper trail. That DIY path is the grey area, and it is where founders run into trouble at audit or withdrawal time.
Where StableCorp fits
StableCorp off-ramps your USDC into INR on compliant FEMA rails, not the grey area — settling against supported RBI purpose codes (P0802, P1004, P1005, P1006, P1007, P1009) so every payout carries a proper record. You get the speed of stablecoins with the audit trail FEMA expects. See the full breakdown in our guide on FEMA and RBI rules for receiving USDC in India, or learn how to receive USDC payments from US clients. Direct off-ramp to INR runs at 1% — see pricing.
This is general information, not legal or tax advice; confirm current FEMA guidance with the RBI or a qualified advisor before acting.
Sources
Reserve Bank of India — FEMA Notifications — https://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx
Reserve Bank of India — Liberalised Remittance Scheme (LRS) — https://www.rbi.org.in/Scripts/FAQView.aspx?Id=115