09 March 2015
What is the FDI allowed for establising/Starting a JV of office furniture industry.
What are the export duties involve in exporting furniture and how much they are for GCC countries
09 March 2015
he 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)
Project Office: The RBI has provided a general permission to foreign companies for establishing POs in India, provided they 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 in India for the project. However, if the above criteria are not met, then such applications need to be forwarded to the RBI.
The RBI has also provided the general permission for opening a BO in SEZs provided such units are functioning in those sectors where 100% FDI is permitted; such units comply with the Part XI of the Company’s Act 1956 and function on a standalone basis.
It should, however be noted that general permission in case of PO/BO is not available to investors from Pakistan, Afghanistan, Bangladesh, Sri Lanka, Iran and China. ?
General permission means no prior approval is required from RBI subject to prescribed conditions.
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). The other rules and regulations relating to LO/BO/PO can be seen from the RBI master circular- (http://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=7312).
CAclubindia
