75th Founding Day Lecture Meeting on “India@2030” Know More

September 2011

A.P. (DIR Series) Circular No. 2, dated 15-7-2011 — Regularisation of Liaison/Branch Offices of foreign entities established during the pre-FEMA period.

By Gaurang Gandhi, Chartered Accountant
Reading Time 2 mins
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Presently, prior approval of RBI is required for establishing a Liaison Office (LO)/Branch Office (BO) in India by a person resident outside India. This Circular advices persons resident outside India who have established LO/BO in India and have not obtained permission from RBI to do so within a period of 90 days from the date of issue of this Circular, for regularisation of establishment of such offices in India, in terms of the extant FEMA provisions.

Similarly, foreign entities who may have established LO or BO with the permission from the Government of India, must also approach RBI along with a copy of the said approval for allotment of a Unique Identification Number (UIN).

These applications/requests must be submitted to the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Fort, Mumbai-400001 in form FNC and should be routed through the bank where the account of such LO/ BO is maintained. A.P. (DIR Series) Circular No. 3, dated 21-7- 2011 —Facilitating Rupee Trade — Hedging facilities for non-resident entities.

This Circular permits non-resident importers and exporters to hedge their currency risk in respect of exports from India and import to India, respectively, where invoices are raised in Indian Rupees. The operational guidelines, terms and conditions, etc. are annexed to this Circular.

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