AD category-I bank and is maintained with the AD |
and the balance , if any , is distributed to its shareholders . An |
||
category I bank on behalf of residents and non-residents |
administrator , called a liquidator , is appointed ; he collects the |
||
towards payment of share purchase consideration . |
debts of the company and distributes any surplus among the |
||
|
Q . 12 What are the reporting requirements of the Reserve Bank of
India ?
Reporting requirements to the RBI : The Company has to report within 30 days of receiving the application money ( inward remittance ); intimation is to be made to the concerned regional
|
members . A company may be wound up either by compulsory winding up by court or voluntary winding up by shareholders or creditors . For details , visit the following link-
( http :// www . mca . gov . in / MCA21 / CloseCompany . html )
Information on starting a Liaison Office / Branch
|
||
office of the RBI in respect of the inward bank remittance received in the prescribed form . The company is also required |
Office / Project Office in India |
||
to intimate the RBI within the 30 days of issuing shares to the |
Q . 15 What are the rules and regulations for the establishment of a |
||
foreign investor in the prescribed form . The RBI will issue a |
Branch office or other place of business in India ? |
||
registration number to the company which is to be mentioned for future correspondence with the RBI , while repatriating funds , etc . |
As can be seen from Q . 7 the LO / BO / PO can be opened under
3 routes ( refer Question 7 of Section I ). In case of “ RBI route ” and “ Government route ”, the application needs to be
|
||
n |
The capital instruments should be issued within 180 days |
submitted to the RBI |
|
from the date of receipt of the inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NRE / FCNR ( B ) account of the non-resident investor . In case , the capital instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE / FCNR ( B ) account , the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE / FCNR ( B ) account , as the case may be . Non-compliance with the above provision would be |
The process of opening a LO / BO / PO is as follows : 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 Foreign Investment Division , Foreign Exchange
Department , Reserve Bank of India , Central Office , Mumbai , through an authorised dealer bank .
For sanctioning of LO / BO , the RBI also considers the track record and net worth of the foreign entities . The details can be seen from page no . 2 and 3 of the following link-
( http :// rbidocs . rbi . org . in / rdocs / notification / PDFs / 07LO280313FL . pdf )
|
||
reckoned as a contravention under FEMA and would |
Project Office : The RBI has provided a general permission to |
||
attract penal provisions . |
foreign companies for establishing POs in India , provided they |
||
n n |
Apart from the company needs to comply with reporting requirements of Registrars of companies like filling form 2 etc .
Reporting of transfer of shares between residents and nonresidents and vice- versa is to be done in Form FC-TRS within 60 days .
|
have secured a contract from an Indian company 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 Financial Institution or a bank |
|
n |
Details of issue of shares against conversion of ECB have |
in India for the project . However , if the above criteria are not |
|
to be reported to the Regional Office concerned of the RBI |
met , then such applications need to be forwarded to the RBI . |
||
n |
The Indian company issuing ADRs / GDRs has to furnish to |
The RBI has also provided the general permission for opening a |
|
the Reserve Bank , full details of such issue in the |
BO in SEZs provided such units are functioning in those sectors |
||
prescribed form , within 30 days from the date of closing of |
where 100 % FDI is permitted ; such units comply with the Part |
||
the issue . |
XI of the Company ’ s Act 1956 and function on a standalone |
||
n |
The details and forms can be seen from the Page No . 81 to |
basis . |
|
119 of the following link- |
It should , however be noted that general permission in case of |
||
( http :// dipp . nic . in / English / Policies / FDI _ Circular _ 01 _ 2013 . pdf ) |
PO / BO is not available to investors from Pakistan , Afghanistan , |
||
Q . 13 Are investments and profits earned in India repatriable ? |
Bangladesh , Sri Lanka , Iran and China . |
||
All foreign investments are freely repatriable ( net of applicable taxes ) except in cases where : |
n |
General permission means no prior approval is required from RBI subject to prescribed conditions . |
|
|
i ) the foreign investment is in a sector like defence wherein the foreign investment is subject to a lock-in period ( 3 years );
Further , dividends ( net of applicable taxes ) declared on foreign investments can be remitted freely through an authorized dealer bank . The details can be seen from the Page No . 81-82
|
Within 30 days of obtaining approval from the RBI , a Form of
Establishment ( Form No . 44 ), is required to be filled and filed with the RoC along with the prescribed documents . The
LO / BO / PO also needs to comply with Part XI of the company ’ s act 1956 . ( Section 591 to 608 ).
|
||
of the following link- |
The other rules and regulations relating to LO / BO / PO can be |
||
( http :// dipp . nic . in / English / Policies / FDI _ Circular _ 01 _ 2013 . pdf ) |
seen from the RBI master circular- |
||
Q . 14 Can a company in India be wound up ? |
( http :// www . rbi . org . in / scripts / BS _ CircularIndexDisplay . aspx ? Id = 7312 ) |
||
Winding up of a company is a process whereby all the affairs of |
Q . 16 What are the permissible activities which LO / BO can undertake ? |
||
the company are wound up , all assets sold , liabilities paid off |
LO / BO can undertake only the activities specified below : |
||