(i)Firms/Companies in India desiring to open offices (trading/non-trading) or post representatives abroad including offices/representatives sought to be opened/posted abroad for promotion of their exports should submit applications to their bankers (authorised dealers) in form OBR alongwith the particulars of their turnover duly certified by their auditors and also a declaration to the effect that they have not approached/would not approach any other authorised dealer for the facility being applied for. Authorised dealers may release exchange towards initial expenditure as also for recurring expenses of the office as under, provided the applicant fulfils the following conditions: (i)Firms/Companies in India desiring to open offices (trading/non-trading) or post representatives abroad including offices/representatives sought to be opened/posted abroad for promotion of their exports should submit applications to their bankers (authorised dealers) in form OBR alongwith the particulars of their turnover duly certified by their auditors and also a declaration to the effect that they have not approached/would not approach any other authorised dealer for the facility being applied for. Authorised dealers may release exchange towards initial expenditure as also for recurring expenses of the office as under, provided the applicant fulfils the following conditions:
| Category | Initial Expenditure
(per annum)
| Recurring Expenditure |
(a)EEFC Account holders |
No limit for remittances out of EEFC funds. |
No limit for remittances out of EEFC funds. |
(b)Firms/companies not having EEFC accounts or not having sufficient funds in EEFC accounts. |
Up to 2% of their average annual sales/income turnover during last two years |
Up to 1% of their average annual sales/income turnover during last two years |
|
NOTES:- A.
- The above limits are applicable for all the overseas offices of the applicant taken together. In regard to category (b) above the ceiling is inclusive of remittances, if any, allowed out of EEFC Account.
- B.
- In the case of newly established 100% EOUs or Units in EPZs and hardware/Software Technology Parks, exchange may be released as per their estimated requirements for initial as well as recurring expenses on verification of suitable documentary evidence during the first two years of their operation. Fromthird year onwards, exchange may be released as per item (a) or (b)above.
- C.
- Remittances towards actual retainer fees may be allowed to be made to the overseas agents engaged for rendering services for promotion of exports by Indian firms/companies provided
(a) the applicant does not have a non-trading/trading office or representative posted at that centre,
(b) the eligibility criteria as stated in (i) above is satisfied and
(c) the amount of retainer fee is within the ceiling fixed for recurring expenses of all the overseas offices taken together as stated above.
- D.
- Firms/companies wishing to take Indian goods such as floor covering, furniture and other items for office use may approach Reserve Bank for grant of GR waiver in respect of such exports.
(ii) Remittance facilities on the above basis may be allowed initially for a period of two years only, after obtaining confirmation from the applicant that they have completed all legal and other formalities in India and abroad in connection with the opening of trading/non-trading office or for posting a representative abroad. While issuing approval the following terms and conditions should be advised to the applicant. a) The overseas office should not create any financial liabilities contingent or otherwise for the Head Office in India.
b) Exchange released by the authorised dealer should be strictly utilised for the purpose(s) for which it is released. The unused exchange may be repatriated to India under advice to the authorised dealer.
c) The details of bank account opened in the overseas countries should be promptly reported to authorised dealer.
d) The approval granted for the purpose should be made valid for 6 months from the date thereof, within which time the applicant should open its overseas office or post representative abroad. In case the overseas office is not opened or the representative is not posted abroad within this period, an intimation in writing to that effect should be sent to the authorised dealer immediately after expiry of 6 months period. Fresh application for release of exchange should be submitted to the authorised dealer as and when the overseas office is desired to be opened.
e) Profits, if any, earned by the overseas office/s should be repatriated to India.
f) The following statements should be submitted by the applicant to the authorised dealer:
(A) A statement showing details of initial expenses incurred together with suitable documentary evidence, wherever possible, within three months from the date of release of exchange for that purpose.
(B) Annual account of trading/non-trading office abroad duly certified by statutory Auditors/Chartered Accountants.
(iii) Authorised dealer should send a report of permission granted for opening of trading/non-trading office/posting of representative abroad in form ORA on a monthly basis to the Regional Office of Reserve Bank. The statement should be submitted to the concerned office of Reserve Bank within ten days from the close of month. Where remittances are made by utilising funds held in EEFC accounts, authorised dealers may obtain from the applicants a statement in form ORR. Copies of ORR statements should be submitted to Reserve Bank by authorised dealers after adding their certification thereon alongwith the monthly statements in form ORA. The records relating to the remittance facilities should be kept in a systematic manner by authorised dealers so as to facilitate inspection. A `nil statement in form ORA may be sent if no permission is granted during the month, for the above purpose. (iv) The renewal of remittance facility after two years may be granted, provided proper accounts of utilisation of foreign exchange released are furnished to the authorised dealer.
(v) Applications from firms/companies who do not satisfy the conditions in (i) above are required to be made in form OBR to the concerned Regional Office under whose jurisdiction the Registered/Head Office of the applicant is situate. The applicant should justify the need for setting up the office. Reserve Bank will also consider applications for posting technical representatives abroad by manufacturer exporters of sophisticated machinery etc. to provide technical support, after sales service etc.
(vi) Firms/companies having trading offices abroad operating on no remittance basis or maintained out of funds in EEFC accounts need not apply for renewal of permission to continue the existing office abroad. However, annual statements as indicated in paragraph 9B.1(ii)(f) should be submitted to the authorised dealer.
NOTE: Setting up of offices and posting of representatives abroad and meeting their expenses from out of foreign exchange retained abroad or from foreign exchange released by Reserve Bank for any other purpose or from out of proceeds of exports or any income earned abroad is prohibited.
Category Initial Expenditure Recurring Expenditure
(per annum) (a)EEFC Account Nolimit for remittances No limit for remittances holders out of EEFC funds. out of EEFC funds. (b)Firms/companies Up to 2% of their average Up to 1% of their average annual
not having EEFC annual sales/income turnover sales/income turnover during last
accounts or not during last two years two years
having sufficient
funds in EEFC
accounts.
NOTES: A. The above limits are applicable for all the overseas offices of the
applicant taken together. In regard to category (b) above the ceiling
is inclusive of remittances, if any, allowed out of EEFC Account. B. In the case of newly established 100% EOUs or Units in EPZs and
hardware/Software Technology Parks, exchange may be released as
per their estimated requirements for initial as well as recurring expenses
on verification of suitable documentary evidence during the first two years
of their operation. Fromthird year onwards, exchange may be released
as per item (a) or (b)above.
C. Remittances towards actual retainer fees may be allowed to be made
to the overseas agents engaged for rendering services for promotion of
exports by Indian firms/companies provided (a) the applicant does not have
a non-trading/trading office or representative posted at that centre,
(b) the eligibility criteria as stated in (i) above is satisfied and
(c) the amount of retainer fee is within the ceiling fixed for recurring
expenses of all the overseas offices taken together as stated above.
D. Firms/companies wishing to take Indian goods such as floor covering,
furniture and other items for office use may approach Reserve Bank for grant
of GR waiver in respect of such exports. (ii) Remittance facilities on the above basis may be allowed initially for a period of two years only, after obtaining confirmation from the applicant that they have completed all legal and other formalities in India and abroad in connection with the opening of trading/non-trading office or for posting a representative abroad. While issuing approval the following terms and conditions should be advised to the applicant. a) The overseas office should not create any financial liabilities contingent or otherwise for the Head Office in India. b) Exchange released by the authorised dealer should be strictly utilised for the purpose(s) for which it is released. The unused exchange may be repatriated to India under advice to the authorised dealer. c) The details of bank account opened in the overseas countries should be promptly reported to authorised dealer. d) The approval granted for the purpose should be made valid for 6 months from the date thereof, within which time the applicant should open its overseas office or post representative abroad. In case the overseas office is not opened or the representative is not posted abroad within this period, an intimation in writing to that effect should be sent to the authorised dealer immediately after expiry of 6 months period. Fresh application for release of exchange should be submitted to the authorised dealer as and when the overseas office is desired to be opened. e) Profits, if any, earned by the overseas office/s should be repatriated to India.
f) The following statements should be submitted by the applicant to the authorised dealer: (A) A statement showing details of initial expenses incurred together with suitable documentary evidence, wherever possible, within three months from the date of release of exchange for that purpose. (B) Annual account of trading/non-trading office abroad duly certified by statutory Auditors/Chartered Accountants. (iii) Authorised dealer should send a report of permission granted for opening of trading/non-trading office/posting of representative abroad in form ORA on a monthly basis to the Regional Office of Reserve Bank. The statement should be submitted to the concerned office of Reserve Bank within ten days from the close of month. Where remittances are made by utilising funds held in EEFC accounts, authorised dealers may obtain from the applicants a statement in form ORR. Copies of ORR statements should be submitted to Reserve Bank by authorised dealers after adding their certification thereon alongwith the monthly statements in form ORA. The records relating to the remittance facilities should be kept in a systematic manner by authorised dealers so as to facilitate inspection. A `nil statement in form ORA may be sent if no permission is granted during the month, for the above purpose. (iv) The renewal of remittance facility after two years may be granted, provided proper accounts of utilisation of foreign exchange released are furnished to the authorised dealer.
(v) Applications from firms/companies who do not satisfy the conditions in (i) above are required to be made in form OBR to the concerned Regional Office under whose jurisdiction the Registered/Head Office of the applicant is situate. The applicant should justify the need for setting up the office. Reserve Bank will also consider applications for posting technical representatives abroad by manufacturer exporters of sophisticated machinery etc. to provide technical support, after sales service etc.
(vi) Firms/companies having trading offices abroad operating on no remittance basis or maintained out of funds in EEFC accounts need not apply for renewal of permission to continue the existing office abroad. However, annual statements as indicated in paragraph 9B.1(ii)(f) should be submitted to the authorised dealer.
NOTE: Setting up of offices and posting of representatives abroad and meeting their expenses from out of foreign exchange retained abroad or from foreign exchange released by Reserve Bank for any other purpose or from out of proceeds of exports or any income earned abroad is