ANSHUMAN KHANDELWAL (JOB) (311 Points)
06 November 2008a foreign company has subsidiary in india.parent company want to send some money to india.what are the ways to receive it ? condition : subsidiary dont want to show this amount as a loan/advance in their accounts.& if we increase authorised capital of indian company then it creates ROC compliance.
is there any way to receive this money as a working capital ?
thanks in advance
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 06 November 2008
What is the purpose of sending this money?
ANSHUMAN KHANDELWAL
(JOB)
(311 Points)
Replied 06 November 2008
for meet out expenditure in indian company.may be capital exp. or revenue
CA. Dashrath Maheshwari
(TaXpert)
(15090 Points)
Replied 06 November 2008
The Indian firm/companies should submit applications to their bankers (authorised dealers) in form OBR along with 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. The application form OBR needs to be filled in with necessary details along with supporting documents. After which the foreign exchange is released by the authorised dealer (bank).
|
FOREIGN EXCHANGE RELEASED BY THE BANK 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 |
Recurring Expenditure (per annum) |
|
|
(a) |
EEFC Account (Exchange Earners’ Foreign Currency account) |
No limit for remittances out of EEFC funds. |
No limit for holders remittances out Of EEFC funds. |
|
(b) |
Firms/companies not having EEFC accounts or not having sufficient funds EEFC accouts. |
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. |
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. From third year onwards, exchange may be released as per item (a) or (b) above. Thus for first two years such units can get more foreign exchange released than the limits for other Indian companies.
The recurring (expenditure) remittance facilities are allowed initially for a period of two years only, after obtaining confirmation form 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. 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.
ANSHUMAN KHANDELWAL
(JOB)
(311 Points)
Replied 06 November 2008
Dear
thanks for info.but i want to know that what is the treatment in the books of indian counter part of this money.subject to info/condition given above my initial Query?
CA. Dashrath Maheshwari
(TaXpert)
(15090 Points)
Replied 06 November 2008
The head office - branch accounting can be done, if you remember the 'MIGL' Jaipur, and the setup done by me, in tally.
Vishal D Shah
(CA. FEMA & Tax Consultant)
(929 Points)
Replied 07 November 2011
Mr Maheshwari,
How is Form OBR used for getting money from foreign parent in India??? Can you please explain as I am getting confused from the discussion & opinion / advice.
CAclubindia
