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RBI/2018-19/132
A.P. (DIR Series) Circular No. 20
February
27, 2019
To,
All Category - I Authorized
Dealer Banks
Madam / Sir
Establishment of Branch Office
(BO) / Liaison Office (LO) / Project Office (PO) or any other place of
business in India by foreign entities
Attention of the Authorised
Dealer (AD - Category I) banks is invited to the 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,
notified by the Reserve Bank vide Notification
No FEMA 22(R)/RB-2016 dated March 31, 2016, as amended from time to
time.
2. In terms of extant
Regulations, applications received from a Non-Government Organisation,
Non-Profit Organization, Body/Agency/Department of a foreign Government for
opening of a branch office or a liaison office or a project office or any
other place of business in India are to be forwarded to the Reserve Bank for
prior approval and be considered in consultation with the Government of
India. This has since been reviewed and as notified through Notification No FEMA 22(R)(1), it is advised that
if such an entity is engaged, partly or wholly, in any of the activities
covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), it shall
obtain a certificate of registration under the said Act and shall not seek
permission under FEMA 22(R).
3. Accordingly, the Form FNC has
also been suitably modified and the following phrase added under the
heading ‘Declaration’ in Part II clause (ii), at the end of the existing
sentence.
“We will not undertake either
partly or fully, any activity that is covered under Foreign Contribution
Regulation Act, 2010 (FCRA) and we understand that any misrepresentation
made or false information furnished by us in this behalf would render the
approval granted under the Foreign Exchange Management (Establishment in
India of a branch office or liaison office or a project office or any other
place of business) Regulations, 2016, automatically as void ab initio and
such approval by the Reserve Bank shall stand withdrawn without any further
notice”.
4. All other provisions of the
LO/BO/PO policy shall remain unchanged. AD Category - I banks may bring the
contents of this circular to the notice of their constituents and
customers.
5. The Master Direction No. 10 dated January 1, 2016 is
being updated simultaneously to reflect the changes.
6. The directions contained in
this circular have been issued under Section 10(4) and 11(2) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law.
Yours faithfully
(R. K. Moolchandani)
Chief General Manager
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