Payment to foreign entity on behalf of sister concern

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sathyam (Querist)
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20 August 2012 Dear Expert,

A newly formed pvt ltd co is yet to obtain IE CODE. It wants to make purchase advance to a foreign entity. Since it doesn't have IE CODE it wants to remit the payment through its sister concern in which one of the directors is proprietor. Is it permissible under FEMA..? pls reply asap.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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20 August 2012 Noted that "as per para 2.8 (iii) of foreign trade policy 2009-2014, a person (exporter/ importer) is exempt from IEC code if they are importing / exporting the goods for personal use / agriculture purpose"

if your sister concern company's Name is mentioned in IEC code it it is admissible to remit money.

sathyam

sathyam (Querist)
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20 August 2012 No. This is not personal/agricultural transaction. This is business transaction. I modify my question.

1)Whether IE CODE IS REQUIRED FOR MAKING ADVANCE PAYMENT TO FOREIGN ENTITY FOR CURRENT ACCOUNT TRANSACTION?

2)As the company yet to obtain IE CODE, can the payment routed through sister concern (transferring amount to sister concern and from there to foreign entity but invoice and shipment only to original company only the payment is routed through sister concern)

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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20 August 2012 an exporter a/c will be convert in EEFC account .

i already reply you that if their sister concerned company address and name is mentioned in IEC code can remit it.

regards,

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