PART B - OFFICES AND REPRESENTATIVES ABROAD

Establishment of Overseas Offices

9B.1

(i)

Firms/Companies in India desiring to open offices (trading/non-trading) or post

representatives abroad including offices/representatives sought to be opened/posted abroad for promotion of their exports should submit applications to their bankers (authorised dealers) in form OBR alongwith the particulars of their turnover duly certified by their auditors and also a declaration to the effect that they have not approached/would not approach any other authorised dealer for the facility being applied for. Authorised dealers may release exchange towards initial expenditure as also for recurring expenses of the office as under, provided the applicant fulfils the following conditions:

Category

Initial Expenditure

Recurring Expenditure (per annum)

(a)

EEFC Account

No limit for remittances out

No limit for holders remittances out

of EEFC funds.

of EEFC funds.

(b)

Firms/companies

Up to 2% of their average

Up to 1% of their average annual

not having EEFC

annual sales/income turnover

sales/income turnover during last

accounts or not

during last two years.

two years.

having sufficient

funds EEFC accouts.

NOTES:

A.

The above limits are applicable for all the overseas offices of the applicant taken together. In regard to category (b) above the ceiling is inclusive of remittances, if any, allowed out of EEFC Account.

B.

In the case of newly established 100% EOUs or Units in EPZs and Hardware/Software Technology Parks, exchange may be released as per their estimated requirements for initial as well as recurring expenses on verification of suitable documentary evidence during the first two years of their operation. From third year onwards, exchange may be released as per item (a) or (b) above.

C.

Remittances towards actual retainer fees may be allowed to be made to the overseas agents engaged for rendering services for promotion of exports by Indian firms/companies provided (a) the applicant does not have a non-trading/trading office or representative posted at that centre, (b) the eligibility criteria as stated in (i) above is satisfied and (c) the amount of retainer fee is within the ceiling fixed for recurring expenses of all the overseas offices taken together as stated above.

D.

Firms/companies wishing to take Indian goods such as floor covering, furniture and other items for office use may approach Reserve Bank for grant of GR waiver in respect of such exports.

(ii)

Remittance facilities on the above basis may be allowed initially for a period of two

years only, after obtaining confirmation from the applicant that they have completed all legal and other formalities in India and abroad in connection with the opening of trading/non-trading office or for posting a representative abroad. While issuing approval the following terms and conditions should be advised to the applicant.

a)

The overseas office should not create any financial liabilities contingent or otherwise for the Head Office in India.

b)

Exchange released by the authorised dealer should be strictly utilised for the purpose(s) for which it is released. The unused exchange may be repatriated to India under advice to the authorised dealer.