Reserve Bank of India (RBI) has noticed that certain Branch Offices (BOs)/ Liaison Offices (LOs) established by the foreign Non- Profit Organizations (NPOs) / Non-Government Organizations (NGOs)/ news agencies and other foreign entities continue to function in India, without the prior approval of the RBI, after the Foreign Exchange Management Act (FEMA), 1999 came into force from 1 June 2000.
The Reserve Bank of India (RBI) has decided that all foreign entities including NGOs/ NPOs/Government bodies and news agencies, operating in India through BOs/ LOs, who are continuing to function in India without obtaining any approval from RBI i.e. established under erstwhile FERA provisions, should approach RBI within 90 days from the date of issue of this circular (i.e. 15 July 2011) for regularization of establishment of such offices in India, in terms of extant FEMA provisions.
RBI/2011-12/112
A.P. (DIR Series) Circular No. 02,
Dated- July 15, 2011
Regularization of Liaison / Branch Offices of foreign entities established during the pre-FEMA period
Attention of Authorised Dealer Category – I (AD Category-I) banks is invited to Notification No. FEMA 22/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, as amended from time to time, read with A.P. (DIR Series) Circular Nos. 23 and 24 dated December 30, 2009, in terms of which a person resident outside India requires the prior approval of the Reserve Bank of India for establishing a Liaison Office (LO) /Branch Office (BO) in India. Further, attention of the AD Category – I banks is invited to A.P. (DIR Series) Circular No. 23 dated December 30, 2009 in terms of which applications from foreign Non-Government Organisations (NGOs) / Non-Profit Organisations (NPOs) / Government bodies / Departments for establishing BO / LOs in India are considered by the Reserve Bank in consultation with the Government of India, Ministry of Finance.
2. It has come to the notice of the Reserve Bank that certain BOs / LOs established by the foreign NGOs, NPOs, news agencies and other foreign entities are continuing to function in India, without the approval of the Reserve Bank, after the Foreign Exchange Management Act (FEMA), 1999 came into force from June 1, 2000. Under the provisions of FEMA, 1999, ibid, the request of such entities to open an office in India is considered by the Reserve Bank in consultation with the Government of India, wherever required.
3. Accordingly, the foreign entities who have established LO or BO in India and continuing to function without obtaining permission from the Reserve Bank of India should approach the Reserve Bank within a period of 90 days from the date of issue of this circular for regularization of establishment of such offices in India, in terms of the extant FEMA provisions.
4. The foreign entities who may have established LO or BO with the permission from the Government of India may also approach the Reserve Bank along with a copy of the said approval for allotment of a Unique Identification Number (UIN) by the Reserve Bank of India.
5. All such applications/ requests should be submitted to the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Fort, Mumbai – 400 001 in form FNC and should be routed through the AD Category – I bank where the account of such LO /BO is maintained.
6. AD Category – I banks may bring the contents of this circular to the notice of their constituents/ customers concerned and forward such application/ request to the Reserve Bank, after complying with the instructions contained in A.P. (DIR Series) Circular Nos. 23 and 24 dated December 30, 2009. Further, they may also ensure that their constituents operating LO/ BO in India have valid approval from the Reserve Bank for the same and that a copy of such approval is kept on record.
7. The directions contained in this circular have been issued under sections 10(4) and 11(1) 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,
(Meena Hemchandra)
Chief General Manager-in-Charge
Related Press Release
Regularisation of Liaison Offices / Branch Offices of foreign entities established in India during the pre-FEMA regime
The Reserve Bank of India has today issued an A.P. (DIR Series) Circular on the captioned subject on its web-site www.rbi.org.in.
It is observed that certain Liaison Offices (LO)/ Branch Offices (BO) established by foreign Non Government Organisations (NGOs), Non Profit Organisations (NPOs), news agencies and other foreign entities are continuing to function in India, without the approval of the Reserve Bank, even after the Foreign Exchange Management Act (FEMA), 1999 came into force from June 1, 2000.
Under the provisions of FEMA Act 1999, liaison offices/ branch offices can only be established with the prior permission from the Reserve Bank of India. Reserve Bank of India considers the requests of such entities to open an office in India, in consultation with Government of India, wherever required.
Accordingly, the foreign entities which have established LO or BO in India without obtaining permission from the Reserve Bank of India should approach the Reserve Bank within a period of 90 days from the date of the A.P. (DIR Series) Circular No.02 dated July 15, 2011 for regularization of establishment of such offices in India, in terms of the extant FEMA provisions. Further, the foreign entities who have established LO or BO with the permission from the Government of India may also approach the Reserve Bank along with a copy of the said approval for allotment of a Unique Identification Number (UIN) by the Reserve Bank of India.
The foreign entities are also requested to be guided by the latest guidelines and procedures for establishment of LO or BO by foreign entities issued vide A.P. (DIR Series) Circular Nos. 23 and 24 dated December 30, 2009, as amended from time to time, as available on our web site www.rbi.org.in ® Notifications ®FEMA.
Ajit Prasad
Assistant General Manager
Reserve Bank of India (RBI) has noticed that certain
Branch Offices (BOs)/
Liaison Offices (LOs)
established by the foreign
Non- Profit Organizations (NPOs) / Non- Government Organizations (NGOs)/ news
agencies and other foreign entities continue to function in India, without the prior approval of the RBI, after the
Foreign Exchange
Management Act (FEMA), 1999 came into force from 1 June 2000.
Now the RBI, vide circular
dated 15 July 2011, has
decided that all foreign
entities, including NGOs/
NPOs/ Government bodies
and news agencies,
operating in India through BOs/ LOs, who are continuing to function in India
without obtaining any
approval from RBI, should approach RBI within 90 days from the date of issue of this circular for regularization of establishment of such offices in India, in terms of extant FEMA provisions.
