How to close a Branch office actives in India

How to close a Branch office actives in India

 

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-

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;

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 various issues relating to this. Please feel free for clarification, if any required in this regard.

The branch must be on a “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

• 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;
• stamped & Signed 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 ;
• Stamped & Signed 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;
• Signed & stamped details of the state;

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

Project Office in India

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) 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 ·  Foreign company has to secure a contract for a project from an Indian firm that will be executed in India ·  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 ·  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.

 

 

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