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ESTABLISHMENT OF BRANCH OFFICE/LIASON OFFICE/PROJECT OFFICE IN INDIA BY A FOREIGN ENTITY

FEMA - Foreign Exchange Management - By: - ARUN KUMAR V K - Dated:- 28-4-2016 - What is the criteria for establishing a liason office or branch office in India by a foreign entity? A body corporate incorporated outside India (including a firm or other association of individuals), may open a Liaison Office (LO) / Branch Office (BO) in India subject to permission from the Reserve Bank of India (RBI) under provisions of Foreign Exchange Management Act, 1999. Such foreign entity shall submit an appl .....

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e, Government of India. What are the additional criteria considered by RBI before sanctioning BO / LO of a foreign entity? Track Record: For BO - such entity should be profit making during immediately preceding five (05) financial years in its home country. For LO - such entity should be profit making during immediately preceding three (03) financial years in its home country. Net Worth: Net worth [(total of paid-up capital plus free reserves) minus intangible assets as per latest audited Balanc .....

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Regional Office, 6, Parliament Street, New Delhi - 110 001, India, along with following documents: Certificate of Incorporation s English version or MoA & AoA attested by Indian Embassy / Notary Public in the Country of Incorporation. Latest audited Balance Sheet of the applicant foreign entity. A Unique Identification Number (UIN) will be allotted to BO / LO established with RBI s approval. The BO / LO shall also apply for Permanent Account Number (PAN) from the Income Tax Authorities on s .....

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ible market opportunities and providing information about the Company and its products to the prospective customers. Permission to set up LO is initially granted for a period of 03 years and this may be extended from time to time by an AD Category I bank. LO can undertake the following activities in India: Representing in India the parent company / group companies. Promoting export / import from / to India. Promoting technical/financial collaborations between parent/group companies and companies .....

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ign entities engaged in manufacturing or trading activities are allowed to set up BO in India with specific approval of RBI. BO should be engaged in the activity in which parent company is engaged. Such BO is permitted to represent parent / group companies to undertake following activities in India: Export / Import of goods. Rendering professional or consultancy services. Carrying out research work, in areas where parent company is engaged. Promoting technical or financial collaborations between .....

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ndirectly. What are the conditions for establishing a BO in Special Economic Zones (SEZs)? General permission has been given by RBI to foreign companies for establishing BO in SEZs to undertake manufacturing and service activities. The general permission to such BO is subject to following conditions: it is functioning in those sectors where 100 % FDI is permitted; it complies with part XI of the Companies Act, 1956 (Section 592 to 602); it function on a stand-alone basis. Can foreign banks estab .....

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l 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. What is the procedure for undertaking additional offices by a BO / LO? Application for establishing additional BO / LO may be submitted through fresh FNC form, duly signed by authorized signatory of foreign entity in the home country to the RBI. However, documents me .....

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e designated AD Category - I bank with the following documents: Copy of RBI's permission/ approval from sectoral regulator(s) for establishing BO / LO. Auditor s certificate - a) indicating manner of arriving at remittable amount supported by a statement of assets and liabilities of applicant, and indicating manner of asset disposal; b) confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc., of office have been either fully met or adequat .....

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