To
All Banks Authorised to Deal in Foreign Exchange
Madam / Sirs,
Remittance of initial and recurring expenses
for Branch offices opened abroad
Attention of Authorised Dealer (AD) banks is
invited to sub-regulation 4A of Notification
No.FEMA 47/2001-RB dated December 5, 2001 enclosed to the AP(DIR
Series) Circular No.54 dated June 29, 2002, in terms of which AD banks were
permitted to allow remittance up to two and one percent of average annual sales/income
or turnover during last two accounting years of the Indian entity for initial
and recurring expenses respectively of the branch or office or representative
abroad.
2. With a view to further liberalise the
procedure, it has been decided to increase the existing limit to ten percent
and five percent for initial and recurring expenses respectively subject to
the existing terms and conditions as mentioned in the above Notification.
3. Accordingly, AD banks may allow remittance
up to ten percent for initial and up to five percent for recurring expenses
of the average annual sales/income or turnover during last two accounting years
subject to the existing terms and conditions.
4. Necessary amendments to the Foreign Exchange
Management (Foreign Currency Accounts by a person resident in India) Regulations,
2000 are being issued separately.
5. AD banks may bring the contents of this
circular to the notice of their constituents and customers.
6. The directions contained in this Circular
have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange
Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals,
if any, required under any other law.
Yours faithfully,
(M. Sebastian)
Chief General Manager