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FAQs on setting up of Liaison / Branch office (LO/BO) of foreign companies / entities in India. (Updated upto July 07 2015)

Dated:- 9-7-2015 - Q.1. How can foreign companies open Liaison /Branch office in India? Ans. As enlisted below: A. Foreign companies/entities desirous of setting up of Liaison Office / Branch Office (LO/BO) are required to submit their application in Form FNC along with the documents mentioned therein 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 through an Authorised Deal .....

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matic 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. C. The following additional criteria are also considered by the Reserve Bank while sanctioning Liaison/Branch Offices of foreign entities: • Track Record For Branch Office - a profit making track record during the im .....

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For Liaison Office - not less than USD 50,000 or its equivalent D. Permission to set up Liaison offices is initially granted for a period of 3 years and this may be extended from time to time by the Authorised Dealer in whose jurisdiction the office is set up. The Branch / Liaison offices established with the Reserve Bank's approval will be allotted a Unique Identification Number (UIN) (www.rbi.org.in/scripts/Fema.aspx). The BOs / LOs shall also obtain Permanent Account Number (PAN) from th .....

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ce Sheet may be submitted within six months from the due date of the Balance Sheet. LOs/BOs are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002.Copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account. Further, at the time of renewal of permission of LOs by AD banks, t .....

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es 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. A Liaison Office can undertake the following activities in India: Representing in India the parent company / group compa­nies. Promoting export / import from / to India. Promoting .....

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aining approval from the Department of Banking Regulations (DBR), Reserve Bank of India. Q. 4. What is the procedure for setting up Branch office? Ans. Permission for setting up branch offices is granted by the Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India. Reserve Bank of India considers the track record of the applicant company, existing trade relations with India, the activity of the company p .....

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represent the parent / group companies and undertake the following activities in India: Export / Import of goods. Rendering professional or consultancy services. Carrying out research work, in areas in which the parent company is engaged. Promoting technical or financial collaborations between Indian companies and parent or overseas group company. Representing the parent company in India and acting as buying / selling agent in India. Rendering services in information technology and devel­op .....

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reely remittable from India, subject to payment of applicable taxes. Q.6. Whether Branch Offices are permitted to remit profit outside India? Ans. 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 Accou .....

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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 Off .....

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the Office in India. e) Any other document/s, specified by the Reserve Bank while granting approval. W.r.t the application made by a BO/LO for making remittance of its winding up proceeds, the designated AD Category -I bank may permit the remittances subject to the directions issued by the Reserve Bank of India in this regard from time to time and payment of applicable taxes in India, if any. Q.8. What is the procedure for setting up Project Office? Ans. The Reserve Bank has granted general perm .....

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k in India for the project. However, if the above criteria are not met or if the parent entity is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran , China, Hong Kong or Macau, such applications have to be forwarded 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 for approval. Q.9. What are the bank accounts permitted to a Project Office? Ans. AD Category - I .....

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enominated in USD and other in home currency, provided both are maintained with the same AD category-I bank. 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. The responsibility of ensuring that only the approved debits and credits are allowed in the Foreign Currency .....

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ithout 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) Proprietary concerns set up abroad are not allowed to establish Branch /Liaison/Project Offices in India. (iii) Entities from Nepal are allowed to establish only Liaison Offices in India. (iv) Branch/Project Offices of a fo .....

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Project Offices are allowed to open non-interest bearing INR current accounts in India. (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 certain stipulations as mentioned in A.P.DIR (Series Circular) No. 142 dated June 12, 2014. (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 .....

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