Hi Experts
Wanted to seek some clarifications regarding Foreign Exchange transactions - inward and outward remittances :
1) We are an Indian subsidiary of our US based parent company and we have an EEFC Account in India.
2) Parent company is providing services for its Client in Europe, through some of its Contractors, working from Europe.
3) Since the parent company does not have a Euro account in US, Parent company wishes to utilize our Euro account in India, for receiving and making Euro payments, to save on exchange fluctuation losses. We shall merely act as per the instructions received from our parent company and shall not have any income accruing out of this.
4) As per parent company's advise, we plan to receive money in Euros in our account.
5) As per parent company’s advise, we plan to process payments in Euros to identified vendors who are contractors of parent company.
6) We shall raise Debit Notes and Credit Notes on parent company for payments made and collections received on their behalf.
7) The balance money shall be transferred back to parent company.
Can you please guide me if the above proposed arrangement is possible without any legal hassles or getting into any non-compliance issues?
Appreciate any help on this.
Thanks
CAclubindia
