Amongst the emerging markets, India has been one of the most attractive investment destinations over the past few years and has witnessed a huge spike in the number of investment deals (private equity / institutional investors / joint venture partners). Private Equity (PE) and Venture Capital (VC) firms invested USD77 billion across 1,266 deals in India in 2021, a 62 percent increase from USD47.6 billion across 923 deals in 20201. Despite the recent downtrend in PE-VC investments in 2022, Foreign Portfolio Investment (FPI) inflows are expected to remain strong in the future, given India's resilient growth outlook.

The Prevention of Money Laundering Act 2002 (PMLA) has provisions to attach immovable properties and other assets derived from proceeds of crime if the parties had knowledge or suspicion about such acts/process of money laundering.

Further, the Prevention of Money Laundering Act states that though the actual crime or illegitimate activity may have been carried out by an entity not directly linked to the target entity, if proceeds of crime were used for any operational expenses or asset creation in the target entity, such assets or expenses could also become questionable, and liable to legal action.

Therefore, It is imperative for investors to understand the following key money laundering risks pertaining to the prospective investee to protect themselves from future liabilities and reputational damage.

To deep dive into understanding the risks and the key considerations for investors, read our document now.

Key Contacts