Complete understanding of setting up a Branch Office in India

Complete understanding of setting up a Branch Office in India 

Complete understanding of Global Companies Preferences and Needs for open up operation setting up a Division or branch in India. a foreign company for setting up an office in India

  • Branch office in India
  • The liaison office in India or
  • Setting up a Private limited company in India or
  • Project office by a foreign company.
www.carajput.com;Foreign Company

www.carajput.com; Foreign Company

There are few requirements for a foreign corporation to open its branch in India. A subsidiary should be established for different reasons and the establishment of a head office in India’s requirements and needs.

The Reasons for set up Branch Office in India

For the following reasons, international firms, including US corporations, are allowed to set up branch offices in India:

  • Import and Export of supply of goods
  • Provision for Professional or advisory facilities
  • Start the research work which includes the parent company is already doing.
  • for enlarge the Promoting technical or financial collaborations between Indian businesses and a foreign parent or group of companies worldwide.
  • To provide the services to the parent company in India and to act as purchasing/selling representatives in India.
  • for initiate information technology services, and software development in India.
  • for the starting technological assistance to parent/group business provided goods.
  • open up Shipping / Foreign Airline operation
  • Global Banks opening

A Branch office is not allowed to conduct production operations of its own but is authorized to subcontract them to an Indian company. Branch offices founded with RBI approval may remit branch income outside India, net of relevant Indian taxes, and subject to RBI guidelines subjected to the condition of RBI grants permission to set up branch offices.

Specifications and conditions of an establishing  Branch office in India

www.carajput.com;procedure to establish a foreign entity

www.carajput.com; procedure to establish a foreign entity

  • Indian branch office name will be the same as the parent business name.
  • The Branch Office has no control, it is just an extension of an Existing company foreign world market.
  • All branch office costs are borne by the Principal /head office because it has Indian activities revenue does not have revenue.
  • Over the immediately intervening five years in the homeworld, the international parent corporation planning to open a branch office in India would have a successful track record.
  • The company must have The Net Worth, i.e., amount of paid-up capital and free deposits, less intangible assets as specified in the latest Audited Balance Sheet or Financial Report accredited by a Certified Public Accountant or other Registered Financial Practitioner of that name shall not be less than or equivalent to USD 100,000.

A branch office is ideal for international firms looking to set up a temporary office in India and not involved or intending to make long-term plans for Indian operations; except for the above-listed finance, shipping and airlines, etc.

Necessary document required to establish a branch office in India

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Presently, the application for the branch office and BRANCH office is sent through the AD according to the Reserve Bank of India conditions. The approved dealer implies obtaining banking licenses for a different entity.

To start a branch office in India the following filings are required:

  • Certification of Incorporation – Translated & duly notarized and properly authenticated.
  • The Latest audited Balance sheet and annual accounts of the parent company duly Translated notarized for the past 3 years and properly authenticated.
  • The expected funding level for operations in India.
  • Details Relating to address of the proposed local office, the number of persons likely to be employed, the number of Foreigners among such employees, and address of the head of the local office, if decided
  • Details of Activity carried out in Home Country by the applicant organization in brief about the product and services of the company in Brief.
  • Bankers Certificate
  • Name, Address, email ID, and telephone number of the authorized person in Home
  • Letter from the principal officer of the Parent company to RBI.
  • Letter of authority from the parent company in favor of Local Representative.
  • Letter of authority/ Resolution from the parent company for setting up BRANCH office in
  • Comfort letter from the parent company intending to support the operation in India.
  • Two copies of the English version of the Certificate of Incorporation, Memorandum & Articles of association (Charter Document) of the parent company duly attested by the Indian embassy or notary public in the country of registration.
  • Details of Bankers of the Organization the Country of Origin along with the bank account number
  • Commitment from the Organization to the effect that it will be open to report / opinion sought from its banker by the Government of India / Reserve Bank of India
  • Form FNC 1 (Three copies)
  • Latest Proof of identity of all the Directors – Properly Certified by Banker in Home Country and duly authenticated
  • Latest Proof of address all of the Directors – Properly Certified by Banker in Home Country and duly authenticated
  • Details of the Individuals / Company holding more 10% of Equity
  • Structure of the Organization and its Shareholding pattern
  • Complete KYC of Shareholders holding more than 10% Equity in the Applicant Company Resolution for Opening up Bank Account with the Banker
  • Duly Signed Bank Account Opening Form for Indian Bank
  • Note: We can assist in getting all these documents, wherever required prepared and advice on the various issue relating to this. Please feel free for clarification, if any required in this regard.

The RBI accepts the application for BRANCH office licenses but the Approved Dealers (AD) route the applications for BRANCH office as per the recent changes. Despite that, the timeframe for creating the BRANCH office has significantly expanded. Even the paperwork needed for the same has significantly increased.

Other criteria for Incorporation of Branch Office

That RBI-licensed branch office shall be licensed with the Ministry of Corporate Affairs, it is a branch office registration as a foreign business establishment in India. On such registration, the business registrar allocates a CIN i.e. Corporate Identification Code. The following forms must be filled out with the Companies Registrar:

  • Form 44
  • Charter, laws or document and articles of agreement or other act constituting or establishing the creation of a company(In the manner provided for in Rule 16, General Rules and Functions of the Companies (Central Government), 1956)
  • Unless the records alluded to above are not in English instead of the original edition of the papers.
  • Information Director(s)-Persons
  • Information Director(s)-Public bodies
  • Reserve Bank of India letter of approval
  • Information Secretary(s)
  • Resolution of control of attorney or board in lieu of designated representative(s)

Procedural criteria for post-incorporation

The below few more criteria for a branch office are also required after Incorporation:

  • PAN of company.
  • TAN (Tax-deductible Number) -Shop and Establishment certificate details
  • certificate of GST Registering if  Branch provides services in India or provide  facilities in India

Annual enforcement practices a Branch Office needs

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Every branch office is required each year to do the following activities:

  • To be maintaining complete record Files
  • To audited Financial Report
  • To be Filling with RBI Annual Operation Certificate
  • To be Completion of the regular report and balance sheet for business registrar
  • to timely inform about some shift in the world Business constitution of RBI & ROC
  • to timely information about any change of Foreign Company Directors to RBI & ROC
  • to timely information about all change or shift to RBI & ROC at the BRANCH office
  • No additional place of business may be established until RBI intimation and approval.

Regarding company management standards in India see also Annual Corporate Filings in India.

How to close a Branch office actives in India

www.carajput.com; Branch Office

www.carajput.com; Branch Office

A branch office license is usually issued for three years. If a business decides to close the branch office set up in India at any time, it must file with the RBI via its Registered Dealer the required documentation. Liaison offices cannot able closed without Properly compliance made with ROC,

The specification for the termination usually contains the followings:

DOCUMENTS REQUIRED FOR CLOSING OF LIAISON OFFICE: – For processing the Closing of Liaison Office, it shall file the necessary documents with the  AD, and the application for the closure shall be forwarded by the Authorized Dealer. following documents are required

  •   Copy of the Reserve Bank’s permission/ approval from the sectoral regulator(s) for establishing the BO / LO.
  •   Auditor’s certificate-
  1. i) indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets;
  2. ii) confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc., of the Office have been either fully met or adequately provided for; and iii) confirming that no income accruing from sources outside India (including proceeds of exports) has remained un-repatriated to India.
  • NOC / Tax Clearance Certification for the remittances from the Income-Tax department.
  • Confirmation from the applicant/parent corporation that no civil proceedings are pending at any court in India and that there is no procedural barrier to the remittance.
  • A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 1956, in case of winding up of the Office in India.
  •  Any other document/s, specified by the Reserve Bank while granting approval.
  • Copy of the authorization/approval by the Sectoral Regulator(s) of the Reserve Bank to create the BO / LO.

Note: We can assist in getting all these documents, wherever required prepared and advice on a various issues relating to this. Please feel free for clarification, if any required in this regard.

The branch must be on “Stand Alone basis” in India 

Stand-alone branch offices are segregated and restricted to the Special Economic Zone ( SEZ) only, and no commercial activity/transaction is allowed beyond India’s SEZs, which involve branches/subsidiary offices of the parent company.

For a business to create a branch/unit in SEZs to conduct manufacturing and service activities under prescribed conditions, no approval is needed from RBI.

Liaison Office /Representatives office 

www.carajput.com; Branch Office

www.carajput.com; Branch Office

With the approval of the Indian government, a liaison office could be created or started. The Liaison Office’s function is limited to knowledge collection, export/import promotion, and promoting technical/financial partnerships.

The Liaison Office can not do any commercial operation explicitly or implicitly for business operations in India. For  processing the Liaison Office application of Stand Partners, the following fresh documents are required:

  • Duly signed & stamped detailed covering application ;
  • Financial projections of the proposed liaison office duly certified from its auditors ;
  • Signed & stamped new form FNC in quadruplicate ;
  • Fresh notarised & apostle Certificate of Incorporation of the applicant company along with Memorandum & Articles of Association ;
  • Signed & stamped Audited Financials of last 3 year from the auditors of the company duly signed from directors of the applicant company;
  • Fresh notarised & apostle POA along with duly signed & stamped board resolution of the applicant company
  • Signed & stamped letter of authority in our favor;
  • Signed & stamped details of activities carried on by the applicant company and to be carried on by the proposed liaison office ;
  • Signed & stamped details of Companies banker along with a report from the respective bank  about its tenure of operation of account & relations with the applicant company ;
  • Signed & stamped details of the state;
  • Signed & stamped details of directors of the applicant company;
  • A letter of comfort is not required in case if the applicant company provides audited financials of last year;

Should you require any further clarification/explanation in this regard, please feel free to revert.

Project Office in India 

www.carajput.com; Branch Office

www.carajput.com; Branch Office

Foreign companies intending to carry out unique projects in India will create temporary project/site offices in India to carry out activities relevant to that project only. The Indian Government has now given foreign companies normal permission to create project offices subject to defined conditions.

S.No. Particulars
A. SET-UP OF PROJECT OFFICE
1. GENERAL PERMISSION
Reserve Bank has granted general permission to foreign companies to establish Project Offices in India,

provided they have secured a contract form an Indian company to execute a project in India, and

(a) the project is funded directly by inward remittance from abroad; or

(b) the project is funded by bilateral or multilateral International Financing Agency; or

(c) the project has been cleared by an appropriate authority, or (d) a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

2. SPECIFIC PERMISSION
However, if the above criteria are not met, or if the parent entity is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, such applications have to be forwarded to the Central Office of the Foreign Exchange Department of the Reserve Bank at Mumbai for approval.
Procedure for Opening Project Office by Foreign Companies in India:

·        The foreign company has to apply in the form FNC 1 to the Reserve Bank of India in order to open a project office in the country

·        The foreign company has to secure a contract for a project from an Indian firm that will be executed in India

·        The project, that the foreign company has secured, has to be approved by the appropriate authority or

·        The project, that the foreign company has secured, has to receive funding directly from abroad in the form of inward remittance or

·        The project that the foreign company has secured has to receive funding from the Agency of International Financing or

·        The Indian firm that has given the contract to the foreign company has been granted by a bank or Financial Public Institution a term loan in the country for the project

 
Documents/Information Required:

·        Duly filled application form by Foreign Company

·        Copy of Memorandum / Charter of incorporation of a foreign company

·        Certificate of Incorporation of a foreign company

·        KYC of a foreign company

·        Name and address of Foreign Company

·        Reference No. and date of letter awarding the contract along with a copy of the contract, if any

·        Particulars of authority awarding the contract

·        Total amount of contract

·        Address of proposed project office

 

Note: It is really necessary to select the right form of company or corporate body for a foreign investor in India that better fits its interests and takes care of the issues of liability and tax planning. Foreign firms seeking to do business in India will pay careful attention to Foreign Investors Entry Strategies & Tax Preparation and corporate structuring to save taxes to the maximum possible degree permitted by laws and international tax treaties.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

RBI Governor Press Announcements highlights: RBI reduces the rate, extends the loan relief

Announcements: RBI of the Government: 22/05/2020

www.carajput.com; Reserve Bank of India

www.carajput.com; Reserve Bank of India

  1. Term loan moratorium extends to August 31, 2020-The debt moratorium will be continued to August 31, 2020. Which gives it a six-month moratorium.
  2. Interest deferral on working capital-Interest on working capital is deferred by another 3 months, i.e. until 31 August 2020.
  3. Conversion of interest on working capital to fixed-term loans-Loan agencies is permitted to turn accrued interest on working capital facilities over the deferment period (until August 31, 2020) into a secured interest-term loan (repayable by March 31, 2021).
  4. The margin for Working Capital – Drawing Power – Lending institutions was required to return working capital margins to the original amount by 31 March 2021.
  5. Reduce the repo rate by 40 bps to 4%. The interest rate should then be reduced.
  6. Export Credits-Maximum Allowable Export Credit (Pre and Post Shipping) extended from 12 months to 15 months.
  7. Payment against imports-Extension of the time limit to allow payments against imports from 6 months to 12 months
  8. Help to EXIM Bank-Facility of Rs 15.000 crore credit line for 90 days for US dollar swap facility will be given to EXIM Bank.
  9. Extension of Resolution Timelines-Deferment or moratorium time shall be removed when measuring the 180-day resolution deadline.
  10. Group Financing -Group exposure increased from 25% to 30%
  11. SIDBI support – In order to provide greater flexibility to SIDBI, a further 90-day extension of the 90-day loan facility will be offered.
  12. Trade Impact -Loan moratorium shall have no effect on improvements in asset classification, financial history, and aging requirements, etc.
  13. Trade Impact-The The volume of world trade can fall by 13 percent-32% this year.

    Post by Rajput Jain & Associates

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Corporate and Professional Updates on 12th July 2019

RBI Updates:

Image result for RBI hd Pics
  • The Reserve Bank (RBI) slashed by half its US dollar purchases in May from the month before to just about dollar 2.5 billion as the inflows slowed amid uncertainty over US interest rates and elections The central bank bought dollar 5.1 billion and sold dollar 2.6 billion in May, taking net spot dollar purchases to dollar 2.5 billion, according to the latest figures released by the RBI. This is almost half the level of net dollar purchases in April this year when the central bank bought a net of dollar 4.9 billion from the spot market. The central bank was a net seller in May 2018, during which it sold dollar 5.8 billion.
  • The central bank has remained a very passive participant in the forward markets as well. It bought dollar 224 million in the forward markets in May, RBI data showed. Foreign portfolio investors were cautious during the month bringing in a little less than dollar 1 billion during the month. Also, foreign direct investments slowed during the month. The rupee weakened by about 0.1% during the month to end at dollar 69.65 by the end of May. But after the general elections, there has been an improvement in foreign portfolio investments. The rupee has also gained against the dollar indicating strong inflows through a variety of sources.
  • After the union budget, there has been some slowdown in portfolio flows in the secondary markets. But the proposal to raise dollar funds by the government to part-finance its expenses is expected to increase dollar flows, which would require the central bank to purchase these dollars to release rupee funds. The government is working on a sovereign benchmark for external borrowing that will be finalized in September this year, after which there could be some pickup in dollar flows.

SEBI Updates:

  • The government has sought information from the Securities and Exchange Board of India about the origins of those foreign portfolio investors that use the trust structure and the assets that they manage, said a person familiar with the development. It also asked for data on the tax liability of each of the structures employed by FPIs — trusts, companies, and limited liability partnerships.
  • A large number of FPIs in India will be impacted as they are structured either as trusts or AoPs. In the meantime, the Asia Securities Industry and Financial Markets Association, an FPI lobby group, met senior Sebi officials to share their concerns on the budget proposal to increase the tax surcharge on the super-rich. As per data provided to the government, 40% of the FPIs use the trust structure, while 60% of them prefer to use the corporate structure.

Key Due Dates:

  • 07-07-2019 – Deposit of TDS/TCS for the month of June 2019.
  • 07-07-2019 -Equalisation levy deposit which is withheld at the time of payment by the service recipient where the annual payment made to one service provider exceeds Rs.1,00,000 in one financial year for the specified and notified services.
  • 10-07-2019 – GSTR 8 for E-Commerce Companies for the m/o June 2019.
  • 10-07-2019 – Filing GSTR-7 (for the assessee who is required to deduct TDS under GST) for the m/o June 2019.
  • 10-07-2019 – Issue of TDS Certificate for salary for the financial year 2018-19.
  • 11-07-2019 – GSTR-1 for the month of June 2019 for taxpayers with Annual Aggregate turnover more than 1.50 Crore.
  •  13-07-2019 – GSTR-6 for Input Service Distributor.
  • 14-07-2019 – Issue of TDS Certificate for tax deducted under section 194-IA/194-IB in m/o           May’19.
  • 15-07- 2019 – Quarterly statement of TCS for the quarter ending 30 June 2019.
  • 15-07-2019- ESI/PF Payment for m/o June 2019.
  • 15-07-2019- FLA Report it is required to be submitted directly by all Indian Companies which have received  FDI or made FDI abroad for m/o June 2019.
  • 18-07-2019- GSTR-4 Quarterly return for taxpayers opting for composition scheme.
  • 20-07-2019 – GSTR-3B for the m/o June 2019.
  • 20-07-2019 – GSTR-5 for the m/o June 2019.
  • 20-07-2019 – GSTR-5A for the m/o June 2019.
  • 25-07-2019-  EPF returns filing for the month of June 2019.
  • 30 -07-2019 -Quarterly TCS certificate in respect of tax collected by any person for the quarter ending June 30, 2019.
  • 30-07-2019 – Furnishing challan-cum-statement in respect of tax deducted u/s 194-IA/194IB in the month of June’19.
  • 31-07-19 – GSTR-1 for June Quarter applicable for taxpayers with Annual Aggregate turnover up to Rs. 1.50/- Crore.
  • 31-07- 2019 – Quarterly statement of TDS for the quarter ending 30 June 2019.
  • 31-07- 2019 – Income Tax return for the F.Y 2018-19 (A.Y 2019-20) for all assessee other than (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) working partner of a firm whose accounts are required to be audited or (d) an assessee who is required to furnish a report u/s 92E.
  • 31-07-2019- Payment of Professional Tax and Shop and Establishment taxes.
  • 31-07-2019- Form 67 Due date for claiming Foreign Tax Credit, upload statement of Foreign income offered for tax for the previous year 2018-19 and of Foreign tax deducted or paid on such incomes.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Corporate and Professional Updates on 1st June 2019

Direct Tax Updates:

Image result for hd pics on direct tax
  • Delhi High Court restrained the Income Tax Department from taking any action against VVIP chopper deal scam accused Gautam Khaitan against whom a black money case has been lodged. Court said Khaitan, an advocate by profession, has made out a “good prima facie” case for grant of interim relief and grave prejudice would be caused to him if the authorities are not restrained at this stage from proceeding further. 
  • CBDT do not want to let go the Revenue Dues owed by Shell Companies that have been deregistered by the MCA. But the task is easier said than done, as it would mean the restoration of over 4,000 companies identified by the CBDT. The CBDT has been holding talks with the MCA over this.

Indirect Tax Updates:

Image result for indirect tax pics hd
  • The new option has been introduced wherein the consignment of one e-way bill has to be moved in multiple vehicles, after moving to transshipment place.
  • Different high courts in the country have given stay orders on several fiats of the National Anti-profiteering Authority (NAA) for the GST, casting doubts on the legal tenability of the way the nearly one-and-half-a-year-old set-up operates and passes orders on alleged cases of profiteering by businesses.A review by FE revealed that at least five firms have got reliefs from the high courts, in what allowed them to defer coughing up an aggregate amount of Rs 430 crore. 

RBI Updates:

Image result for rbi pics
  • Government is open to providing more powers to the RBI to direct lenders to take action on stressed assets. There is a growing view in the government that there has to be some regulatory supervision over debt resolution by the RBI.
  • RBI has asked NBFCs with asset size of more than Rs.5,000 crore to appoint a chief risk officer (CRO) with clearly specified role and responsibilities, in view of the increasing role in direct credit intermediation of these companies. The RBI directive comes in the backdrop of the IL&FS imbroglio and its ripple impact on NBFCs.
  • RBI wants NBFCs with assets of more than 5,000 Crore must appoint a Chief Risk Officer (CRO). It said that with the increasing role of NBFCs in direct credit intermediation, there is a need for NBFCs to Augment Risk Management Practices.
  • RBI Appointed Committee headed by Aadhaar architect Nandan Nilekani submits its suggestions on Promoting Digital Payments to RBI Governor Shaktikanta Das. The 5-member team was formed in January this year to consult with various stakeholders of the payments ecosystem and deliberate on solutions to further strengthen the industry

Other Updates:

  • MCA sees Rs 2.8 lakh cr recovery from IBC-led RP.
  • IOC to examine US sanction’s impact on CPCL plans
  • India may witness slowdown as oil imports decline
  • DoT to soon settle merger/transfer of licences in M&As
  • BoB looks to rationalise 800-900 branches
  • Pre-monsoon rainfall deficit drops to 22 per cent
  • Reliance Capital protests ratings downgrade
  • India reports trade deficit with 11 RCEP members in FY 2018-19
  • OPEC members meet to assess oil market after US sanctions on Iran
  • NMDC plans to acquire 100 per cent stake in Australia’s Legacy Iron-Ore Ltd
  • Debt-ridden Essar Steel reports Rs 4,229 cr EBITDA during insolvency period
  • ICICI-Videocon loan case: Kochhar contests bonus clawback, ESOP termination
  • NBFC crisis to top agenda of new govt.
  • Jet employee group offers to invest $700 million
  • AgMA Energy plans to launch India-specific agri products
  • No interest in taking control of IndiGo: Rakesh Gangwal
  • Dredging Corporation of India wins annual contracts from Cochin and Paradip port trusts
  • ONGC, GIP, Tripura govt eye to buy out IL&FS’s 26% stake in OTPC
  • TCS eyes double-digit growth in FY20, says COO Subramaniam
  • Dr Reddy’s Laboratories serves a bitter medicine in March quarter
  • RBI’s vision document on payment systems to spur digital economy: Fintech firms
  • Life insurance industry to focus on millennials, digital-human interface
  • IMFA posts loss of Rs 74 cr in January-March qtr
  • Power producers seek removal of double taxation on imported coal
  • RBI to boost card payments with 34% increase in PoS terminals by end of 2021
  • Japan’s Orix to acquire wind assets of IL&FS
  • GST Council may consider national bench of AAAR next month
  • FPIs withdraw Rs 6,399 crore in May so far
  • AstraZeneca moves US court against Aurobindo
  • RBI releases ‘Vision 2021’ for payment systems for ‘cash-lite’ society

Key Due Dates:

  • The Due Date of GSTR-1  For the Month Of May is 10th June 2019.
  • The Due Date of GSTR-3b For the Month Of May is 20th June 2019.
  • The Due Dates for the Deposit of TDS/TCS for the Purchase of Property 30th June 2019.\
  • Annual Return For Registered Tax Payers is 30th June 2019.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

REPORTING OF FORM FC-TRS TO RBI

REPORTING OF FORM FC-TRS TO RBI

www.carajput.com FC-TRS

www.carajput.com FC-TRS

RBI Circular No. 40 dated 1st February 2016; RBI has made it mandatory to report any transactions and filing of forms online in respect of issue and transfer of shares from an Indian Entity to outside India.

What is RBI Compliance under FORM-FC-TRS? 

  • Foreign currency transfer is the absolute full form of the Form FC-TRS.
  • It is a process used by shareholders residing outside India who are residing in India or vice versa when transferring their shares.
  • The FC-TRS form, together with the FC-GPR form, will be uploaded to its authorized dealer bank, which will send the very same form to the Reserve Bank Of India.
  • Foreign investors can invest in Indian companies by purchasing/acquiring existing shares from Indian shareholders or from other non-resident shareholders.
  • General permission has been granted to non-residents / NRIs for the acquisition of shares by way of transfer.
  • Any transfer of shares takes place between a resident and a non-resident, the resident individual or the entity has to report the transaction to RBI by filing of Form FC-TRS online at https://www.ebiz.gov.in. The reporting of Form FC-TRS should be submitted to the AD category bank within a period of 60 days from the date of receiving the money.

What is the process of Form FC-TRS 

a) Download form from Pre-filled Form FC-TRS from https://www.ebiz.gov.in

b)Fill the required details of the Investee Company

(i) Name of the Company

(ii) PAN of the Company

(iii) Address of the Company

(iv)Telephone Number of the Company

(v) Fax Number of the Company

(vi) Email ID of the Company

(vii) Main Business Activity of the Company as per the NIC Code  2008 series

c)Enter the details of the Buyer

(i) Name of the Buyer

(ii) Address of the Buyer

(iii) Telephone Number of the Buyer

(iv) Email ID of the Buyer

(v) Nature of the Investing Entity

(vi) Date and Place of Incorporation of the Investing Entity

d)Details of the Seller

(i) Address of the Seller

(ii) Telephone Number of the Seller

(iii) Email of the Seller

(iv) Name of the Disinvesting Entity

e)Enter the details of the Foreign Investment in the Company.

f)Mandatory Attachments

(i) Declaration by the Non-resident Buyer

(ii) KYC Form in respect of Non-resident Investor

(iii) Copy of FIRC (To be procured from Bank receiving the remittance)

(iv) Valuation Report by a Chartered Accountant or SEBI registered Merchant Banker

g)Once the form is completed in all respects without any error; the Name, Designation, Place, and Digital Signature of the Declarant is to be attached

After following all the above steps the form is now ready to be uploaded on the Ebiz portal. Upon uploading the Form an “Application Number” is generated instantly and it can be used to keep a track of the status of the Form.

It has to be well kept in mind that merely uploading the Form does not mean that all the compliances have been fulfilled, the compliance shall deem to be complete only after approval by the Reserve Bank of India (RBI).

General Instructions for filling the FC-TRS 

  • The electronic form (Form) can be accessed from service landing page and can be filled offline
  • If you choose “Load prefill data” option while opening the form, then some fields may get prefilled with data you have filled previously while applying for this service. You may change this data if you wish.
  • The saved draft can be accessed later from “My Saved Drafts” section in Menu options. This draft is available for 3 months or until the form is submitted.
  • Field marked with * are mandatory and needs to be filled in before a form can be submitted on e-Biz portal. You may not be able to leave some of the field’s blank in the e-Form. In case you wish not to enter data in a field, please input “NA” if it is a text/description field or a 0, if it is a numeric field.
  • The e-form needs to be digitally signed using a digital signature by the applicant. If an applicant wishes to make any modifications to an already signed e-Form, right-clicking on the signature field and choosing “Clear signature” will enable editing of the form and any modifications can be made to the form

Electronic Attachments required for FORM FC-TRS :

Upload the file using the attached link and if you wish to remove any file, use the remove link.

  • Reason for delay in submission: this attachment is required if the form is submitted after 30 days from the date of receipt of funds
  • CS Certificate
  • Certificate from SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
  • Disclaimer certificate
  • Statutory Auditor Certificate
  • Board resolution
  • LRN(Loan Registration Number) allotted
  • Copy of FIPB approval (if required)
  • Transfer of shares details, if applicable

If the investor and remitter are separate entities, Than Give the following documents:

  • No objection certificate from the remitter for  the shares being allotted to the third party mentioning their relationship
  • Letter from the foreign investor explaining the reason for making a subscription to shares by the remitter on his behalf
  • Copy of agreement/Board resolution from the investee company for issue and allotment of shares to the foreign investor, other than the remitter
  • KYC report for the beneficiary

Any other attachments: Add any other document if required.

Step Required for Form FC-TRS

Following below step required for filling FC-TRS following below actions:

Step 1: Apply the registration for Business Users

Step 2: Logging in to the FIRM USER

Step 3: Signing in to the SMF and connecting to your workplace.

Step 4: Choose the type of return.

Step 5: Details of Selected common investment

Step 6: Specific information or details to be filed as required

Step 7: Details of particular Transfer as specified

Step 8: Complete details of Remittal as per specified required.

Step 9: Complete details of Shareholding pattern to be enter

Step 10: Submit an Online form

Verification required for FORM FC-TRS:

Enter the following details in this section:

  1. Name of the Person
  2. Name of the Place
  3. Date of signing the electronic form
  4. Designation.
  5. Digital Signature of Authorized signatory of the investee company.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)