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Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations 2016

FEMA - FEMA 22(R) /RB-2016] - Dated:- 31-3-2016 - RESERVE BANK OF INDIA (Foreign Exchange Department ) (CENTRAL OFFICE ) NOTIFICATION Mumbai, the 31st March, 2016 G.S.R.384.-In exercise of the powers conferred by sub-section (6) of Section 6 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in supersession of Notification No. FEMA 22/2000-RB dated May 3, 2000, as amended from time to time, the Reserve Bank of India makes the following regulations to prohibit, restrict and regulate e .....

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erson authorised as an authorised dealer under sub-section (1) of Section 10 of the Act. c. 'Foreign company' means a body corporate incorporated outside India and includes a firm or other association of individuals. d. 'Branch Office' in relation to a company, means any establishment described as such by the company. e. 'Liaison Office' means a place of business to act as a channel of communication between the principal place of business or Head Office or by whatever nam .....

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oject 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. 3. Prohibition against opening .....

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ch company has obtained necessary approval under the provisions of the Banking Regulation Act, 1949. b. An insurance company resident outside India shall not require any approval under these Regulations for establishing any office in India 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. c. A company resident outside India shall not require any approval under .....

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s in India a. Eligibility A person resident outside India can establish a branch office or a liaison office in India provided it meets the following criterion: i. For Branch Office - a profit making track record during the immediately preceding five financial years in the home country and net worth of not less than USD 100,000 or its equivalent. ii. For Liaison Office - a profit making track record during the immediately preceding three financial years in the home country and net worth of not le .....

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rtake or carry on any activity specified in Schedule I or II (Annex B), as the case may be, but shall not undertake or carry on any other activity unless otherwise specifically permitted by the Reserve Bank. c. Application form A person resident outside India desiring to establish a branch office or a liaison office or a project office or any other place of business in India shall submit an application in Form FNC (Annex C) to an Authorised Dealer Category-I bank who may, subject to the provisio .....

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sider granting extension of time for setting up the office by a further period of six months. Any further extension of time shall require the prior approval of the Reserve Bank in this regard. d. Extension of the validity period for liaison office I. A person resident outside India may establish in India under these Regulations a liaison office for a period of three years subject to the provisions of Regulation 4 d (III). The non-resident entity may apply to the Authorised Dealer Category-I bank .....

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e directly submitted to the Department of Banking Regulation (DBR), Reserve Bank and the Insurance Regulatory and Development Authority (IRDA) respectively. III. Entities engaged in construction and development sectors and which are Non-Banking Finance Companies are permitted to open a Liaison Office for two years only. No further extension would be considered for liaison offices of entities which are Non-Banking Finance Companies and those engaged in construction and development sectors (exclud .....

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e/s. f. Project office I. A foreign company may open project office/s in India provided it has secured from an Indian company, a contract 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 Fina .....

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lic Sector Undertaking may open a bank account with an Authorised Dealer Category-I bank without any prior approval from the Reserve Bank. g. Registration with State Police Authorities A person from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau opening a branch office or a liaison office or a project office or any other place of business in India shall have to register with the concerned State Police Authorities. Copy of approval letter for persons from these countries shal .....

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the following documents to the satisfaction of the Authorised Dealer Category-I bank through whom the remittance is effected: i. A certified copy of the audited Balance Sheet and Profit and Loss account for the relevant year. ii. 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 and 3. that the profit does not include any profit on revaluation of the asse .....

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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. j. Acquisition of property Acquisition of property by branch office/project office shall be governed by the guidelines issued under Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations. k. Transfer of assets A person resident out .....

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ex D) as at the end of March 31 along with the audited financial statements including receipt and payment account on or before September 30 of that year. In case the annual accounts of the office are finalized with reference to a date other than March 31, the AAC along with the audited financial statements may be submitted within six months from the due date of the Balance Sheets to the Authorised Dealer Category-bank and the Director General of Income Tax (International Taxation), Drum Shape Bu .....

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submitted to the Authorised Dealer Category - I bank along with the following documents: i. Copy of the Reserve Bank's/Authorised Dealer Category-I bank s approval for establishing the office. ii. Auditor's certificate : 1. 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; 2. confirming that all liabilities in India including arrears of gratuit .....

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provisions of the Companies Act, 2013, in case of winding up of the branch office/liaison in India. v. Any other document/s, specified by the Reserve Bank/Authorised Dealer Category-I bank while granting approval. II. Remittance of winding up proceeds of branch or liaison office established in India shall be governed by the guidelines issued under Foreign Exchange Management (Remittance of assets) Regulations. 5. Approval of the Reserve Bank in certain cases for establishment of branch office, .....

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Kong or Macau and the application is for opening a liaison, branch or project office in Jammu and Kashmir, North East region and Andaman and Nicobar Islands; c. the principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting: Provided that in the case of proposal for opening a project office relating to defence sector, no separate reference or approval of Government of India shall be required if the said non-resident a .....

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India. [No. FEMA 22(R) /RB-2016] INDIRA NANU, Chief General Manager Annex A Format of the Letter of Comfort [See Regulation 4 (a)] The Authorised Signatory, (Address of the Authorised Dealer Category-I bank) Dear Sir, Sub: Application for establishment of branch / liaison office in India by our subsidiary / group company, M/s_____________ You may kindly refer to the application made by our subsidiary / group company, M/s______________to your office for establishing branch / liaison office in In .....

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in the form of our latest Audited Balance Sheet / Account Statement certified by a Certified Public Accountant. Yours faithfully, ( ) Authorised Representative of the parent company Annex B Schedule I [See Regulation 4 (b)] Permitted activities for a branch office 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 co .....

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outside India i. Representing the parent company / group companies in India. 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. Annex C Form FNC [See Regulation 4 (c)] [This application form shall be completed and submitted to the AD Category-I bank designated by the applicant along with the documents mentio .....

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dia by the applicant during each of the last three years: a. Imports from India b. Exports to India ii. Particulars of existing arrangements if any, for representing the company in India. iii. Particulars of the proposed liaison/ branch office: a. Details of the activities/ services proposed to be undertaken/ rendered by the office b. Place where the office will be located c. Phone number d. E-mail ID e. Expected number of employees (with number of foreigners) 5 i. Name and address of the banker .....

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ntract iii. Total amount of contract iv. Address/e-mail/telephone number/fax number of the project office v. Tenure of project office vi. Nature of project undertaken 8 Any other information which the applicant company wishes to furnish in support of this application. Part II- Additional information to be submitted by applicants where Reserve Bank s approval is necessary under Regulation 5 of Notification No. FEMA 22 (R)/2016-RB dated March 31, 2016 I. Details in respect of Company/ Firm Sr. No. .....

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of Birth Parentage Present and permanent address Nationality Passport Nos. and issue date Contact address and telephone number III. Details of shareholders of applicant company (all firms/companies/entities/individuals having shareholding more than 10 % ) Sr. No. Full Name Parentage Father/ Mother Date of Birth Permanent Address Present Address Present position held Nationality (if holding dual nationality, both must be clearly mentioned) % of shares held in the company IV. Details of criminal c .....

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ceedings : Yes/No 2. Criminal proceedings : Yes/No d. If, Yes, please provide the following details 1. Detention/case/FIR/warrant number: 2. Police station/District/Agency : 3. Section of law : 4. Name and place of the court : e. The above mentioned details are in respect of both India and any foreign country. DECLARATION We hereby declare that: i. The particulars given above are true and correct to the best of our knowledge and belief. ii. Our activities in India would be confined to the activi .....

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a report / opinion sought from our bankers abroad by the Government of India /Reserve Bank. vi. We understand that the approval, if granted, is from FEMA angle only. Any other approvals / clearances, statutory or otherwise, required from any other Government Authority/ Department/ Ministry will be obtained before commencement of operations in India. vii. We have no objection to the Reserve Bank placing the details of approval in public domain. viii. We enclose the following documents: a. Copy of .....

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