Foreign Exchange Management (Establishment In India Of Branch Or Office Or Other Place Of Business) Regulations, 2000

Regulation 1- Short title and commencement.

1. (i) These Regulations may be called the Foreign Exchange Management (Establishment         in India of Branch or Office or other Place of Business) Regulations,2000.
 (ii) They shall come into force on 1st day of June, 2000.



Regulation 2- Definitions.

2. In these regulations, unless the context otherwise requires—

  (a)  ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);

“(aa) “authorised dealer” means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act.”

  (b)  ‘foreign company’ means a body corporate incorporated outside India, and includes a firm or other association of individuals;

  (c)  ‘Branch’ shall have the meaning assigned to it in sub-section (9) of section 2 of the Companies Act, 1956 (1 of 1956);

  (d)  ‘Form’ means a Form annexed to these Regulations;

  (e)  ‘Liaison Office’ means a place of business to act as a channel of communication between the principal place of business or head office by whatever name called and entities in India but which does not undertake any commercial/trading/industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel;

 (f)  ‘Project Office’ means a place of business to represent the interests of the foreign company executing a project in India but excludes a Liaison Office;

  (g)  ‘Site Office’ means a sub-office of the Project Office established at the site of a project but does not include a Liaison Office;

 (h) ‘Stand alone basis’ means such branch offices would be isolated and restricted to the Special Economic Zone alone and no business activity/transaction will be allowed outside the Special Economic Zones in India which includes branches/subsidiaries of its parent office in India;

 (i) the words and expressions used but not defined in these Regulations, shall have the same meanings respectively assigned to them in the Act.



Regulation 3- Prohibition against establishing branch or office in India.

3. No person resident outside India shall, without prior approval of the Reserve Bank, establish in India a branch or a liaison office or any other place of business by whatever name called:

Provided that no approval shall be necessary for a banking company, if such company has obtained necessary approval under the provisions of the Banking Regulation Act, 1949 :

 Provided further that no approval shall be necessary from RBI for a company to establish a branch/unit in Special Economic Zones (SEZs) to undertake manufacturing and service activities :

Provided also that :—

I.  such units are functioning in those sectors where 100 per cent FDI is permitted,

II.  such units comply with Part XI of the Companies Act (sections 592 to 602),

III.  such units function on a stand-alone basis,

IV.  in the event of winding-up of business and for remittance of winding-up proceeds, the branch shall approach an Authorized Dealer in Foreign Exchange with the documents except (A) listed in regulation 6(1)(iii) of Notification No. FEMA 13/2000-RB, dated 3rd May, 2000 :

 Provided further that no approval shall be necessary for an insurance company, if such company has obtained approval from the Insurance Regulatory and Development Authority established under section 3 of the Insurance Regulatory and Development Authority Act, 1999, for establishing a Liaison Office in India.




Regulation 4- Prohibition against establishing a branch or office in India by citizens of certain countries.

4. No person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, without prior permission of the Reserve Bank, shall establish in India, a branch or a liaison office or a project office or any other place of business by whatever name called.



Regulation 5- Application to Reserve Bank for opening branch or liaison office.

5.  (i)  A person resident outside India desiring to establish a branch or liaison office in India shall apply to the Reserve Bank through an Authorised Dealer, in Form FNC as amended by Reserve Bank of India from time to time.

(ia) A person resident outside India permitted by the Reserve Bank under this regulation to establish a liaison office in India, may apply to the authoriseddealer concerned for extension of the validity period of approval, and upon receipt of such an application, the authorised dealer concerned may extend the validity period of approval subject to such directions issued by the Reserve Bank in this regard, from time to time.

(ii) A foreign Company may open a Project Office/s in India provided it has secured from an Indian company, a contract to execute a project in India, and

(a)  the project is funded directly by inward remittance from abroad; or

(b)  the project is funded by a bilateral or multilateral International Financing Agency; or

(c)  the project has been cleared by an appropriate authority; or

(d)  a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

(iii)  The Foreign Company shall furnish a report to the concerned Regional Office of Reserve Bank of India under whose jurisdiction the Project Office is set up, giving details as under :

(a)  Name and address of the foreign company

(b)  Reference No. and date of letter awarding the contract referred to in clause (ii) of Regulation 5

(c)  Total amount of contract

(d)  Address and tenure of Project Office

(e)  Nature of Project undertaken.

Explanation - For the purpose of this Regulation,

(i)  ‘a bilateral or multilateral International Financing Agency’ means the World Bank or the International Monetary Fund or similar other body;

(ii)  ‘Public Financial Institution’ is a public financial institution as defined in section 4A of the Companies Act, 1956.



Regulation 6- Activities which may be undertaken by the branch or office in India.

6. (i) A person resident outside India permitted by the Reserve Bank under Regulation 5, to establish a branch or a liaison office in India may undertake or carry on any activity specified in Schedule I or, as the case may be, in Schedule II, but shall not undertake or carry on other activity unless otherwise specifically permitted by the Reserve Bank.

(ii)  Opening of project office under clause (ii) of Regulation 5 is permitted in India and such project office shall not undertake or carry on any other activity other than the activity relating and incidental to execution of the project.



Regulation 7- Remittance of profit or surplus.

7. A person resident outside India permitted by the Reserve Bank under Regulation 5, to establish a branch or Project Office in India may remit outside India the profit of the branch or surplus of the Project on its completion, net of applicable Indian taxes, on production of the following documents, and establishing the net profit or surplus, as the case may be, to the satisfaction of the authorised dealer through whom the remittance is effected.

I. For remittance of profit of a branch,—

(a)  certified copy of the audited balance-sheet and profit and loss account for the relevant year;

(b)  a Chartered Accountant’s certificate certifying,—

(i)  the manner of arriving at the remittable profit,

(ii)  that the entire remittable profit has been earned by undertaking the permitted activities, and

(iii)  that the profit does not include any profit on revaluation of the assets of the branch.

II. For remittance of surplus on completion of the Project,—

(a)  certified copy of the final audited project accounts;

(b)  a Chartered Accountant’s certificate showing the manner of arriving at the remittable surplus;

(c)  income-tax assessment order or either documentary evidence showing payment of income-tax and other applicable taxes, or a Chartered Accountant’s certificate stating that sufficient funds have been set aside  for meeting all Indian tax liabilities; and

(d)  auditor’s certificate stating that no statutory liabilities in respect of the Project are outstanding.



Schedule I

[See Regulation 6(i)]

Permitted activities for a branch in India of a person resident outside India.

(i)  Export/Import of goods

(ii)  Rendering professional or consultancy services.

(iii)  Carrying out research work, in which the parent company is engaged.

(iv)  Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

(v)  Representing the parent company in India and acting as buying/selling agent in India.

(vi)  Rendering services in Information Technology and development of software in India.

(vii)  Rendering technical support to the products supplied by parent/group companies.

(viii) Foreign airline/shipping company.



Schedule II

[See Regulation 6(i)]

Permitted activities for a Liaison office in India of a person resident outside India.

(i)  Representing in India the parent company/group companies.

  (ii)  Promoting export/import from/to India.

(iii)  Promoting technical/financial collaborations between parent/group companies and companies in India.

(iv)  Acting as a communication channel between the parent company and Indian companies.


Master Direction - Establishment of Branch Office (BO)/ Liaison Office (LO)/ Project Office (PO) or any other place of business in India by foreign entities

Master Direction - Establishment of Branch/Liaison/Project Offices in India by foreign entities

(A) General criteria – Liaison Office / Branch Office

A.1 A body corporate incorporated outside India (including a firm or other association of individuals), desirous of opening a Liaison Office (LO) / Branch Office (BO) in India have to obtain permission from the Reserve Bank under provisions of FEMA 1999. The applications from such entities in Form FNC (Annex-1) will be considered by Reserve Bank under two routes:

  1. Reserve Bank Route — Where principal business of the foreign entity falls under sectors where 100 per cent Foreign Direct Investment (FDI) is permissible under the automatic route.

  2. Government Route — Where principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category and those from Non - Government Organisations / Non - Profit Organisations / Government Bodies / Departments are considered by the Reserve Bank in consultation with the Ministry of Finance, Government of India.

A.2 The following additional criteria are also considered by the Reserve Bank while sanctioning Liaison/Branch Offices of foreign entities:

a. Track Record

  • For Branch Office — a profit making track record during the immediately preceding five financial years in the home country.

  • For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country.

b. Net Worth

Net worth [total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name].

  • For Branch Office — not less than USD 100,000 or its equivalent.

  • For Liaison Office — not less than USD 50,000 or its equivalent

A.3 The application for establishing BO / LO in India should be forwarded by the foreign entity through a designated AD Category - I bank to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India, along with the prescribed documents including

  1. English version of the Certificate of Incorporation / Registration or Memorandum & Articles of Association attested by Indian Embassy / Notary Public in the Country of Registration.

  2. Latest Audited Balance Sheet of the applicant entity.

Applicants who do not satisfy the eligibility criteria and are subsidiaries of other companies can submit a Letter of Comfort from their parent company as per Annex-2, subject to the condition that the parent company satisfies the eligibility criteria as prescribed above.

The designated AD Category - I bank should exercise due diligence in respect of the applicant’s background, antecedents of the promoter, nature and location of activity, sources of funds, etc. and also ensure compliance with the KYC norms before forwarding the application together with their comments/ recommendations to the Reserve Bank.

The Branch / Liaison offices established with the Reserve Bank's approval will be allotted a Unique Identification Number (UIN). The BOs / LOs shall also obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up the offices in India and report the same in the Annual Activity Certificate (Annex 3).

The Reserve Bank or the Government of India, as the case may be, reserves the right to reject an application for non-fulfilment of any other condition/s not specifically referred above, fulfilment of which, in the opinion of the Reserve Bank / the Government of India, is necessary for grant of such permission or in the public interest. The Reserve Bank or the Government of India, as the case may be, also reserves the right to verify / examine the activities of the BO / LO of the foreign entities established in India and to withdraw the permission already granted, after due notice, if the circumstances so warrant or due to changes in the policy.

(B) Liaison Office

B.1 Permissible Activities for a Liaison Office

A Liaison Office (also known as Representative Office) can undertake only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India. Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office outside India. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian customers. Permission to set up such offices is initially granted for a period of 3 years and this may be extended from time to time by an AD Category I bank.

A Liaison Office can undertake the following activities in India:

  1. Representing in India the parent company / group companies.

  2. Promoting export / import from / to India.

  3. Promoting technical/financial collaborations between parent/group companies and companies in India.

  4. Acting as a communication channel between the parent company and Indian companies.

B.2 Liaison Office of foreign insurance companies / banks

Foreign insurance companies can establish Liaison Offices in India only after obtaining approval from the Insurance Regulatory and Development Authority (IRDA).

Foreign banks can establish Liaison Offices in India only after obtaining approval from the Department of Banking Regulation (DBR), RBI.

B.3 Extension of validity of the approval of Liaison Offices

The designated AD Category - I bank may extend the validity period of LO/s for a period of 3 years from the date of expiry of the original approval / extension granted by the Reserve Bank, if the applicant has complied with the following conditions and the application is otherwise in order.

  • The LO should have submitted the Annual Activity Certificates for the previous years and

  • The account of the LO maintained with the designated AD Category – I bank is being operated in accordance with the terms and conditions stipulated in the approval.

Such extension has to be granted, as expeditiously as possible, within a period of one month from the receipt of the request under intimation to the Regional Office concerned of the Reserve Bank and to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India, quoting the reference number of the original approval letter and the UIN. AD banks shall also endorse a copy of each such renewal to the office of the DGIT (International Taxation).

The application for extension of the validity period of the LOs of banks and entities engaged in insurance business has to be directly submitted to the Department of Banking Regulation, Reserve Bank of India and Insurance Regulatory and Development Authority (IRDA), respectively as stipulated by them, as hitherto. Further, no extension would be considered for LOs of entities which are NBFCs and those engaged in construction and development sectors (excluding infrastructure development companies). Upon expiry of the validity period, these entities have to either close down or be converted into a Joint Venture (JV) / Wholly Owned Subsidiary (WOS), in conformity with the extant Foreign Direct Investment policy.

The Hon’ble Supreme Court vide its interim orders dated July 4, 2012 and September 14, 2015, passed in the case of the Bar Council of India vs A.K. Balaji & Ors., has directed RBI not to grant any permission to any foreign law firm, on or after the date of the said interim order, for opening of LO in India. Hence, no foreign law firm shall be permitted to open any LO in India till further orders/notification in this regard. However, foreign law firms which have been granted permission prior to the date of interim order for opening LOs in India may be allowed to continue provided such permission is still in force. No fresh permissions/ renewal of permission shall be granted by RBI/AD banks respectively till the policy is reviewed based on, among others, final disposal of the matter by the Hon’ble Supreme Court.

(C) Branch Offices

C.1 Permissible Activities

a). Companies incorporated outside India and engaged in manufacturing or trading activities are allowed to set up Branch Offices in India with specific approval of the Reserve Bank. Such Branch Offices are permitted to represent the parent / group companies and undertake the following activities in India:

  1. Export / Import of goods.

  2. Rendering professional or consultancy services.

  3. Carrying out research work, in areas in which the parent company is engaged.

  4. Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

  5. Representing the parent company in India and acting as buying / selling agent in India.

  6. Rendering services in information technology and development of software in India.

  7. Rendering technical support to the products supplied by parent/group companies.

  8. Foreign airline / shipping company.

Normally, the Branch Office should be engaged in the activity in which the parent company is engaged.

b) Retail trading activities of any nature is not allowed for a Branch Office in India.

c) A Branch Office is not allowed to carry out manufacturing or processing activities in India, directly or indirectly.

d) Profits earned by the Branch Offices are freely remittable from India, subject to payment of applicable taxes.

C.2 Branch Office in Special Economic Zones (SEZs)

(i) Reserve Bank has given general permission to foreign companies for establishing branch/unit in Special Economic Zones (SEZs) to undertake manufacturing and service activities. The general permission is subject to the following conditions:

a. such units are functioning in those sectors where 100 per cent FDI is permitted;

b. such units comply with part XI of the Companies Act,1956 (Section 592 to 602);

c. such units function on a stand-alone basis.

(ii) In the event of winding-up of business and for remittance of winding-up proceeds, the branch shall approach an AD Category – I bank with the documents as mentioned under "Closure of Liaison / Branch Office" except the copy of the letter granting approval by the Reserve Bank.

C.3 Branches of foreign banks

Foreign banks do not require separate approval under FEMA, for opening branch office in India. Such banks are, however, required to obtain necessary approval under the provisions of the Banking Regulation Act, 1949, from Department of Banking Regulation, Reserve Bank.

(D) Application for undertaking additional activities or additional Branch / Liaison Offices

D.1 Requests for undertaking activities in addition to what has been permitted initially by the Reserve Bank may be submitted through the designated AD Category -I bank to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India, justifying the need with comments of the designated AD Category - I bank.

D.2 Requests for establishing additional BO / LOs may be submitted through fresh FNC form (Annex 1), duly signed by the authorized signatory of the foreign entity in the home country to the Reserve Bank of India as explained above. However, the documents mentioned in form FNC need not be resubmitted, if there are no changes to the documents already submitted earlier.

  • If the number of Offices exceeds 4 (i.e. one BO / LO in each zone viz; East, West, North and South), the applicant has to justify the need for additional office/s.

  • The applicant may identify one of its Offices in India as the Nodal Office, which will coordinate the activities of all Offices in India.

(E) Closure of Branch/Liaison Offices

E.1 At the time of winding up of Branch/Liaison offices the company has to approach the designated AD Category - I bank with the following documents:

(a) Copy of the Reserve Bank's permission/ approval from the sectoral regulator(s) for establishing the BO / LO.

(b) Auditor’s certificate- i) indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets; ii) confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc., of the Office have been either fully met or adequately provided for; and iii) confirming that no income accruing from sources outside India (including proceeds of exports) has remained un-repatriated to India.

(c) Confirmation from the applicant/parent company that no legal proceedings in any Court in India are pending and there is no legal impediment to the remittance.

(d) A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 2013, in case of winding up of the Office in India.

(e) Any other document/s, specified by the Reserve Bank while granting approval. The designated AD Category - I banks has to ensure that the BO / LOs had filed their respective Annual Activity Certificates with the Reserve Bank for the previous years, in respect of the existing Branch/Liaison Offices. Confirmation about the same can be obtained from the Central Office of the Reserve Bank in the case of BOs and from the Regional Office concerned in the case of LOs.

E.2 With reference to the application made by a BO/LO for making remittance of its winding up proceeds, the designated AD Category - I bank may permit the remittance subject to the directions issued by the Reserve Bank in this regard from time to time and payment of applicable taxes in India, if any.

E.3 Closure of such BO / LO has to be reported by the designated AD Category - I bank to the Reserve Bank (the Regional Office concerned for LOs and Central Office for BOs), along with a declaration stating that all the necessary documents submitted by the BO / LO have been scrutinized and found to be in order. If the documents are not found in order or cases are not covered under delegated powers, the AD Category - I bank may forward the application to the Reserve Bank, with their observations, for necessary action. All the documents relating to the BO / LO operations may be retained by the AD Category - I bank for verification by the internal auditors of the AD / inspecting officers of the Reserve Bank.

(F) Project Office

F.1 General permission

Reserve Bank has granted general permission to foreign companies to establish Project Offices in India, provided they have secured a contract from an Indian company to execute a project in India, and

i. the project is funded directly by inward remittance from abroad; or

ii. the project is funded by a bilateral or multilateral International Financing Agency; or

iii. the project has been cleared by an appropriate authority; or

iv. a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

However, if the above criteria are not met, the foreign entity has to approach the Reserve Bank of India, Central Office, for approval.

Setting up of Project Offices by foreign Non-Government Organisations/Non-Profit Organisations/Foreign Government Bodies/Departments, by whatever name called, are under the Government Route. Accordingly, such entities are required to apply to the Reserve Bank for prior permission to establish an office in India, whether Project Office or otherwise.

F.2 Opening of Foreign Currency Account

AD Category – I banks can open non-interest bearing Foreign Currency Account for Project Offices in India subject to the following:

i. The Project Office has been established in India, with the general / specific permission of Reserve Bank, having the requisite approval from the concerned Project Sanctioning Authority concerned.

ii. The contract, under which the project has been sanctioned, specifically provides for payment in foreign currency.

iii. Each Project Office can open two Foreign Currency Accounts, usually one denominated in USD and other in home currency, provided both are maintained with the same AD category–I bank.

iv. The permissible debits to the account shall be payment of project related expenditure and credits shall be foreign currency receipts from the Project Sanctioning Authority, and remittances from parent/group company abroad or bilateral / multilateral international financing agency.

v. The responsibility of ensuring that only the approved debits and credits are allowed in the Foreign Currency Account shall rest solely with the branch concerned of the AD. Further, the Accounts shall be subject to 100 per cent scrutiny by the Concurrent Auditor of the respective AD banks.

vi. The Foreign Currency accounts have to be closed at the completion of the Project.

F.3 Intermittent remittances by Project Offices in India

(i) AD Category – I bank can permit intermittent remittances by Project Offices pending winding up / completion of the project provided they are satisfied with the bonafides of the transaction, subject to the following:

  1. The Project Office submits an Auditors’ / Chartered Accountants’ Certificate to the effect that sufficient provisions have been made to meet the liabilities in India including Income Tax, etc.

  2. An undertaking from the Project Office that the remittance will not, in any way, affect the completion of the Project in India and that any shortfall of funds for meeting any liability in India will be met by inward remittance from abroad.

(ii) Inter-Project transfer of funds requires prior permission of the Regional Office concerned of the Reserve Bank under whose jurisdiction the Project Office is situated.

(G) Other general conditions applicable to Branch / Liaison / Project Offices of foreign entities in India

(i) Without prior permission of the Reserve Bank, no person being a citizen of / registered in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau can establish in India, a Branch or a Liaison Office or a Project Office or any other place of business.

(ii) All new entities setting up LO/BO/PO in India shall submit a report containing information, as per format provided in Annex-4 within five working days of the LO/BO/PO becoming functional to the Director General of Police (DGP) of the state concerned in which LO/BO/PO has established its office; if there is more than one office of such a foreign entity, in such cases to each of the DGP concerned of the state where it has established office in India.

(iii) Branch/Project Offices of a foreign entity are permitted to acquire immovable property by way of purchase for their own use and to carry out permitted/incidental activities. However, entities from Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, Hong Kong, Macau, Nepal, Bhutan or China are not allowed to acquire immovable property in India for a Branch / Project Office without prior RBI approval.

(iv) All Branch / Project Offices including Liaison Offices, have general permission to carry out permitted / incidental activities from lease property subject to lease period not exceeding five years.

(v) Branch / Liaison / Project Offices are allowed to open non-interest bearing INR current accounts in India. Such Offices are required to approach their Authorised Dealers for opening the accounts.

(vi) Powers relating to transfer of assets of Liaison / Branch Office/Project Office have been delegated to AD Category-1 Banks subject to compliance with the following stipulations:

  1. Such proposals will be considered only from LO/BOs who are adhering to the operational guidelines stipulated in AP DIR Circular No.23 & 24 of December 30, 2009 such as (i) submission of AACs (up to the current financial year) at regular annual intervals with copies endorsed to DGIT (International Taxation) and (ii) obtained PAN from IT Authorities and have got registered with ROC under Companies Act 1956, if necessary. Similarly, proposals from POs should conform to the guidelines issued in AP DIR Cir.No.44 dated May 17, 2005 with regard to initial reporting requirements (para.2.3) and submission of CA certified annual report indicating project status (para.2.4).

  2. A certificate is to be submitted from the Statutory Auditor furnishing details of assets to be transferred indicating their date of acquisition, original price, depreciation till date, present book value or WDV value and sale consideration to be obtained. Statutory Auditor should also confirm that the assets were not re-valued after their initial acquisition. The sale consideration should not be more than the book value in each case.

  3. The assets should have been acquired by the LO/BO/PO from inward remittances and no intangible assets such as good will, pre-operative expenses should be included. No revenue expenses such as lease hold improvements incurred by LO/BOs can be capitalised and transferred to JV/WOS.

  4. AD bank to ensure payment of all applicable taxes while permitting transfer of assets.

  5. Transfer of assets to be allowed by AD banks only when the foreign entity intends to close their LO/BO/PO operations in India.

  6. Credits to the bank accounts of LO/BO/PO on account of such transfer of assets will be treated as permissible credits.

(vi) Branch Offices are permitted to remit outside India profit of the branch net of applicable Indian taxes, on production of the following documents to the satisfaction of the Authorised Dealer through whom the remittance is effected

a. A Certified copy of the audited Balance Sheet and Profit and Loss account for the relevant year

b. A Chartered Accountant’s certificate certifying

  1. the manner of arriving at the remittable profit

  2. that the entire remittable profit has been earned by undertaking the permitted activities

  3. that the profit does not include any profit on revaluation of the assets of the branch.

(vii) Authorised Dealers can allow term deposit account for a period not exceeding 6 months in favor of a branch/office of a person resident outside India provided the bank is satisfied that the term deposit is out of temporary surplus funds and the branch / office furnishes an undertaking that the maturity proceeds of the term deposit will be utilised for their business in India within 3 months of maturity. However, such facility may not be extended to shipping/airline companies.

(viii) Regularisation of LO / BO of foreign entities established during pre-FEMA period

Under the provisions of FEMA 1999 foreign entities are permitted to establish a branch or liaison office in India with permission of the Reserve Bank of India. Liaison / Branch Offices established in pre FEMA period without approval of Reserve Bank of India may approach the Reserve Bank through their ADs to regularise their offices under FEMA 1999. The foreign entities who may have established LO or BO with the permission from the GoI shall also approach RBI with a copy of the said approval for allotment of a Unique Identification Number by RBI. All such applications should be submitted to the General Manager, Reserve Bank of India, Foreign Exchange Department, Central Office Cell, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001 in Form FNC and should be routed through the AD Category-I bank where the account of such LO/BO is maintained.

(H) Reporting by AD banks:

AD Category-I banks may refer to our separate Master Direction of Reporting (Master Direction No. 18 dated January 16, 2016) available in RBI website www.rbi.org.in for all the reporting requirements with reference to Liaison offices/ Branch offices/ Project offices in India.


 
 
 
 

Sudhir Kochhar

Sudhir Kochhar Sudhir.kochhar@femalaw1999.in 9891743321