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Incorporating a private company dealing in forex

Mayuri Lal (officer CS) (748 Points)

07 January 2011

Dear Members,

We want to incorporate a company which will deal in foreign exchange and tours and travel business.

Will this attract the regulations under FEMA to be complied with RBI?? if yes then wat is the procedure for the same..

will it make any difference if a private company is incorporated???

regards,

Mayuri Lal

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15 Replies

Mayuri Lal (officer CS) (748 Points)
Replied 08 January 2011

Dear Members,

Can anyone plz guide me with the above issue..it is very urgent

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 08 January 2011

Dealing in forex always attract FEMA. Kindly see RBI site which provides compliances for that.

Mayuri Lal (officer CS) (748 Points)
Replied 08 January 2011

AGREED

BUT FOR INCORPORATION DO I NEED TO DO SOMTHING DIFFERENT THAN COMPANY LAW PROCEDURE..

N I THINK THE fema REGULATINS WILL CM INTO PICTURE AFTER THE TRANSACTINS TAKE PLACE ..

M I RITE?

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 08 January 2011

Tours and Travels - no problem. You can incorporate a company following normal Company Law procedure. But dealings in foreign exchange, may be it requires RBI permission as all foreign exchange transactions are regulated by them.

Exports your views please.

Nitin Vasavada (CA) (48 Points)
Replied 08 January 2011

1. For incorporating company (public/private) with the objects for tourism management and related money changing functions [restricted/full fledged money changers (RMC/FFMC)] only company law process for incorporation is required.

2. You will need membership of tourism related association, IATA etc

3. For actually starting the business activity of exchanging currencies/ travellers cheque etc, RBI permissions are required and also a tie up with one Authorised Dealer (Bank). You can interact with FEDAI. The website is at www.fedai.org.in. YOu will be required to become member of FEDAI also. Details of all rules and regulations will be available from FEDAI. For general information see link below :

https://demo83.sify.net/commonman/Scripts/FAQs54.htm & Master circular/notification on the subject of Full Fledged Money Changers on RBI & FEDAI websites

Accordingly and with details from FEDAI & RBI,

(i) FIRST you have to decide the scope of your operations in forex and extent of dealings in forex, amounts etc.over a year/period

ii) Decide whether you want to be full fledged money changer or restricted money changer and get premission form RBI office in the state of your operations.

iii) Register & become member of FEDAI.

iv) Both FEDAI & RBI will give you all relevant guidelines, reporting requirements, circulars and operating materials.

v) Get your staff trained for this by arrangement under FEDAI/RBI

vi) ALTERNATIVELY, initially, if your operations are on a small scale, tie up with any exiating category 2 Authorised Dealer of FFMC who will provide this facility to you and once your staff is well versed, you can have your own registration as FFMC.

you can get approval to act as FFMC (RMC permissions were not granted. Check) from RBI of fullfilling norms and requirements. Details from the link, RBI Office & FEDAI AND FFMC with whom you may tie up.

Mayuri Lal (officer CS) (748 Points)
Replied 08 January 2011

.. Thanks a loot members... this issue is new for me .. so lot of study will be required and your guidance is goin to help me ...

Regards,

mayuri Lal

Nitin Vasavada (CA) (48 Points)
Replied 08 January 2011

https://demo83.sify.net/commonman/Scripts/FAQs54.htm Check it out and my earlier reply.

Kapil (CA Practice) (120 Points)
Replied 08 January 2011

In last days, i ve framed the company to deal in foreign currency. u can ask any problem regarding the issue.

SAMAR JEET SINGH (CA) (72 Points)
Replied 24 January 2011

Dear Kapil,

Can you help me with the following issues in relation to a exisiting Pvt. company to enter into the FFMC business

1. Wordings for object clause. (can a newly formed company change its main object clause)

2. What resolutions to be passed. (if you can forward the format)

3. Kyc. (format as required by the RBI)

4. Total time involved and

5. Particular issue or issues you faced while forming FFMC

Regards,

Samar Jeet

Kapil (CA Practice) (120 Points)
Replied 26 January 2011

Yes Samar,

you can add it under the head main object clause. Just pass a resolution & submit the copy of resolution with altered MOA & AOA to ROC.

After the submission of all the requisite documents with RBI, It will take only 20 to 30 days for reg. with RBI as FFMC.

1 Like

Kapil (CA Practice) (120 Points)
Replied 27 January 2011

There is no specific format for KYC, only requirements provided by RBI on site.

1 Like

namrata (company secretary ) (422 Points)
Replied 27 January 2011

Hi Freinds ,

Please visit this site- www.ourprofessionalteam.com .In that Click on the following link - Format . I hope it may be of some use.

Regards

Namrata

Mayuri Lal (officer CS) (748 Points)
Replied 27 January 2011

Dear MEmbers,

Can a private company be registered with RBI as a Full fledged money changer.. i m confused bkoz in the documentation part applyng for the licence the first document is certificate of incorporation and certificate of commencement.....

can anyone plzz telll me whether is shud goo ahead with the procedure of incorporating a private cmpanyy or shud incorporate a public company???????

Its very urgent..plz suggest..

Regards,

Mayuri Lal

Nitin Vasavada (CA) (48 Points)
Replied 29 January 2011

Yes. Forms list ALL details from ALL types of applicants. You have to submit what is applicable to yopu and explain why the other items are not applicable in short.