Globalisation refers to the integration of markets in the global economy, leading to the increased interconnectedness of national economies. Markets where globalisation is particularly significant include financial markets, such as capital markets, money and credit markets, and insurance markets, commodity markets, including markets for oil, coffee, tin, and gold, and product markets, such as markets for motor vehicles and consumer electronics. The globalisation of sport and entertainment is also a feature of the late 20th and early 21st centuries.
An offshore bank offering international banking is a bank located in any country other than the account holder’s home country. An account held in an offshore bank is therefore often described as an offshore bank account.
While international banking and offshore bank accounts are often negatively perceived as a way to avoid paying tax (which in fact is illegal), they boast legitimate financial advantages for expats over domestic banking arrangements.
While the term originates from the Channel Islands being ‘offshore’ from the UK, the term is used figuratively to refer to any bank regardless of its location; hence, some banks in countries such as Switzerland and Luxembourg are considered offshore banks.
For Opening an accounts abroad to facilitate different business and personal requirements, it is much needed to know the benefits being derived with it. So below mentioned accounts to be opened outside India will give you right knowledge to take Influential decisions.
a) Securing and protecting your capita
b) Enjoying the highest service levels
c) Having convenient and accessible access to funds
d) To potentially save tax on deposits, savings and investments
e) So you can access international investment opportunities
f) To benefit from foreign exchange services
g) For superior lending and credit facilities
a) Account by Authorized Dealer
b) Account by office or branch of Indian Entity
c) Account by Project Exporter or service exporter in or outside India
d) FC accounts for making overseas direct investment
e) Accounts in respect of star ups or other entity notified by RBI
f) FC account keeping funds raised abroad through ECB, ADR & GDR
g) Account by Airline or Shipping Account
h) Account by Indian Insurance company abroad
i) FC account for remitting money under LRS
j) Resident Going outside for visiting or to participate in exhibition/ trade fair
k) Person going out of India for studies can open FC Account
l) Account by Indian Resident during visit abroad
m) FC account for receiving/ remitting salary
n) FC account outside for receiving export proceeds
Opening, holding and maintaining a Foreign Currency Account outside India:-
(A) Accounts of authorised dealers or their branches
(1) An authorised dealer in India may open, hold and maintain with his branch or head office or correspondent outside India, a Foreign Currency Account for the purpose of transacting foreign exchange business and other matters incidental thereto, in accordance with the provisions of the Act or the rules or regulations made or the directions issued thereunder.
(2) A branch outside India of a bank incorporated or constituted in India may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of carrying on normal banking business outside India, subject to compliance with the directions or guidelines issued from time to time by the Reserve Bank, and the regulatory authority in the country where the branch is located.
(B) Account by a company/ firm in the name of its office/ branch/ representative outside India
A firm or a company or a body corporate registered or incorporated in India (hereinafter referred to as ‘the Indian entity’) may open, hold and maintain in the name of its office (trading or non-trading) or its branch set up outside India or its representative posted outside India, a foreign currency account with a bank outside India by making remittances from India for the purpose of normal business operations of the office/ branch or representative;
Provided that –
(a) the overseas branch/ office has been set up or representative is posted overseas for conducting normal business activities of the Indian entity;
(b) the total remittances made under this sub-Regulation by the Indian entity, to all such accounts in an accounting year shall not exceed
i. 15 per cent of the average annual sales/ income or turnover of the Indian entity during the last two financial years or up to 25 per cent of the net worth, whichever is higher, where the remittances are made to meet initial expenses of the branch or office or representative; and
ii. 10 per cent of such average annual sales/ income or turnover during the last financial year where the remittances are made to meet recurring expenses of the branch or office or representative;
(c) the overseas branch/ office/ representative shall not enter in any contract or agreement in contravention of the Act, Rules or Regulations made thereunder;
(d) the account so opened, held or maintained shall be closed,
i. if the overseas branch/ office is not set up within six months of opening the account, or
ii. within one month of closure of the overseas branch/ office, or
iii. where no representative is posted for six months,and the balance held in the account shall be repatriated to India;
Provided further that the restriction contained in clause (b) of the first proviso shall not apply in a case where –
1. the remittances to the account maintained under this sub-Regulation are made out of funds held in EEFC account of the Indian entity, or
2. the overseas branch/ office is set up or representative posted by a 100% Export Oriented Unit (EOU) or a unit in Export Processing Zone (EPZ) or in a Hardware Technology Park or in a Software Technology Park, within two years of establishment of the Unit.
Explanation: For the purpose of this sub-Regulation,
1. Purchase of acquisition of office equipment and other assets required for normal business operations of the overseas branch/ office/ representative will not be deemed as a capital account transaction;
2. Transfer or acquisition of immovable property outside India, other than by way of lease not exceeding five years, by the overseas branch/ office/ representative will be subject to the Foreign Exchange Management (Acquisition and Transfer of Immovable Property outside India) Regulations, 2015.
1. ACCOUNT BY AUTHORIZED DEALER & BANK BRANCH
2. ACCOUNT BY OFFICE OR BRANCH OF INDIA ENTITY
3. ACCOUNT BY PROJECT EXPORTER OR SERVICE EXPORTER IN AND OUTSIDE INDIA
4. FC ACCOUNT FOR MAKING OVERSEAS DIRECT INVESTMENT
5. ACCOUNTS IN RESPECT OF START UPS OR OTHER ENTITY NOTIFIED BY RBI
6. FC ACCOUNT KEEPING FUNDS RAISED ABROAD THROUGH ECB, ADR & GDR
7. ACCOUNT BY SHIPPING OR AIRLINE COMPANY
8. ACCOUNT BY INDIAN INSURANCE COMPANY ABROAD
9. FC account for remittance money under LRS
10. Resident going outside for visit or to participate in Exhibition/Trade fair
11. PERSON GOING OUT OF INDIA FOR STUDIES CAN OPEN FC
12. ACCOUNT BY INDIAN RESIDENT DURING VISIT ABROAD
13. FOREIGN CURRENCY ACCOUNT FOR RECEIVING/REMITTING SALARY
14. FOREIGN CURRENCY ACCOUNT OUTSIDE FOR RECEIVING EXPORT PROCEEDS
By looking into the different kind of Foreign Currency accounts which are allowed to be opened, maintained and closed as per the regulation, it is clearly visible and evident that Government and RBI are desperate to support and facilitate the international transactions at the same time government of different countries also facilitating in a very great way to boost the globalisation and digitization. Looking for the brighter trade and commerce platform to be set in the future to keep pace of upcoming development.