RBI has given general permission to foreign companies for establishing Project Offices in India, provided they have secured a contract from an Indian company to establish a project in India, and the project is funded directly by inward remittance from abroad, or the project is funded by a bilateral or multilateral International Financing Agency, or the project has been cleared by an appropriate authority, or 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. However, if the above conditions are not fulfilled, the foreign company has to approach the RBI, Central Office, for its approval.
Establishing of Project Offices by foreign NGO/Foreign Government Bodies/Departments, by whatever name called, comes under the Government Route. Accordingly, such companies are required to apply to the Reserve Bank for prior permission to execute an office in India.
AD Category – I banks can open non-interest bearing Foreign Currency Account for Project Offices in India subject to the following:
AD Category – I bank can permit intermittent remittances by Project Offices pending winding up / completion of the project provided they are satisfied with the bonafide of the transaction, subject to the following:
Inter-Project transfer of funds requires prior permission of the Regional Office concerned of the Reserve Bank under whose jurisdiction the Project Office is situated.
(i) All new entities setting up Project Offices shall submit a report containing information, as per format provided in Annex 3 within five working days of the PO becoming functional to the Director-General of Police (DGP) of the state concerned in which PO has established its office; if there is more than one office of such a foreign entity, in such cases to each of the DGP concerned of the state where it has established office in India
(ii) The foreign company establishing a Project Office in India is to furnish a report through the concerned AD branch, to the concerned Regional Office of Reserve Bank of India under whose jurisdiction the Project Office is set up, incorporating the following details.
This report shall be forwarded through the AD branch to the Regional Office concerned of the Reserve Bank of India within 2 months of the establishment of the Project Office.
(iii) The Project Office shall also submit to the AD branch on an annual basis, a Certificate from a Chartered Accountant showing the Project Status and certifying that the accounts of the Project Office has been audited and the activities are undertaken are in conformity with the General / Specific permission given by the Reserve Bank.
A copy of the report in Annex 3 shall be filed with the DGP concerned on annual basis along with a copy of the annual certificate, and also with the AD concerned.
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