![]() ![]() ![]() ILJIN Electric Company Limited, a Korean company, has established Delhi Project Office on July 1, 2007, under General Permission for execution of the contract awarded to the company by Delhi Metro Rail Corporation Limited (DMRC).Recent compounding order pronounced by RBI in the matter of ILJIN Electric Co. AD Category-I Bank must ensure payment of all applicable taxeswhile permitting the transfer of assets.Ĭredits to the bank accounts on account of such transfer of assets will be treated as permissible credits.Īny transfer of assets without the necessary approval from AD Banker is liable for penal provision as applicable under the Foreign Exchange Management Act, 1999 and Regulation thereunder.No revenue expenses such as leasehold improvements can be capitalized and transferred to JV/WOS.The assets should have been acquired by PO from inward remittances and no intangible assets such as goodwill, pre-operative expenses should be included.Sale consideration should not be more than the book value in each case. Submission of Statutory Auditors Certificate(SAC) furnishing details of assets to be transferred.The proposal for transfer of assets may be considered by AD Category I Bank only from PO who are adhering to the operational guidelines applicable on it, such as timely submission of AAC, have obtained PAN and registered itself with Registrar of Companies, if necessary along with following conditions: Transfer of assets by way of sale to JV/WoS may be allowed by AD Category-I Bank only when the non-resident entity intends to close their PO operations in India. PO can transfer its own assets or available fund to its other PO in India It is pertinent to note that the PO is required to submit its (AAC) as at the end of March 31 along with the audited financial statements including receipt and payment account on or before September 30 of that year or within six months from the due date of the Balance Sheets to the Authorised Dealer Category-bank and the Director General of Income Tax (International Taxation). (f) the foreign currency accounts have to be closed at the completion of the project. The accounts will also be thoroughly examined by the Concurrent Auditor of the corresponding AD Category–I bank. (e) the AD Category–I bank is exclusively responsible for ensuring that only approved debits and credits are permitted in the foreign currency account. (d) the account’s acceptable debits are project-related expenditure payments, and the account’s permissible credits are foreign currency receipts from remittances from a parent/group company (c) each PO can open two foreign currency accounts, usually one denominated in USD and the other in the home currency of the project awardee, provided both are maintained with the same AD Category–I bank. (b) the contract governing the project specifically provides for payment in foreign currency. (a) the PO has been established in India, with the general/specific permission of Reserve Bank of India, having the requisite approval from the concerned Project Sanctioning Authority concerned as per these Regulations. Upon establishment of Project Office in India it can open Bank Account with AD Category – I Banker non-interest-bearing foreign currency account subject to the following: RBI approval for PO is validity for a period up to the time it takes to complete the project in India. In addition, the PO must have obtained the necessary approval of the Reserve Bank of India. A Project Office can be established in accordance with the applicable provisions of the Foreign Exchange Management Act, 1999 (“FEMA”) read with the Master Direction Establishment of Project Office (PO).Ī Foreign company (FC) is permitted to establish a project office (PO) in India for the purpose of undertaking a contract provided the project is funded directly by inward remittance from abroad.įC should have secured a contract from an Indian company to execute a project in India. Rather than establishing a WOS, they consider setting up a project office and executing the allotted project within the stipulated time. ![]() Some foreign companies just have a project or two. Incorporating a Private Limited Company in India – Non-Resident Perspective.The most common way is through establishing a wholly owned subsidiary (WOS) company. When a body corporate incorporated outside India (Foreign Company) intends to establish it’s operation in India, it needs to decide on the medium through which it can step in the Indian market. Establishment of Project Office and Inter Project Transfer of Fund and Asset 14 February 2022 ![]()
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