RBI issues norms for prior approval of branch offices by foreign entities in India
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Posted on:13 May 2016 16:59:18
13 May 2016 Current Affairs: The Reserve Bank has that entities from Pakistan, China, Bangladesh and four other regions will require its prior approval to establish branch office or project office in India.
Other countries and regions are Sri Lanka, Afghanistan,Iran and Hong Kong or Macau, RBI said while releasing guidelines for foreign entities to open a branch office (BO) or a liaison office (LO) or a project office (PO) in India. Permission of RBI will also be required for opening a BO/LO/PO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands.
The approval is also required if the applicant is a Non-Government Organisation (NGO), a Non-Profit Organisation, or a Body/ Agency/ Department of a foreign government.
Highlights : It will also be needed if the principal business of the applicant falls in the four sectors defence, telecom, private security and information and broadcasting. Applications from persons resident in other countries will be considered by the bank as per the guidelines. BOs are permitted to remit outside India profit of the branch net of applicable Indian taxes, on production of the certain documents.In the case of proposal for opening a PO relating to defence sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/ entered into an agreement with Ministry of Defence or Service Headquarters or Defence Public Sector Undertakings.
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