We provide services & consultancy for establishing Business office (Permanent Establishment) in India consistent with applicable Tax Laws & it includes:-

    1. Setting up of Branch Office, Liaison office, Representative Office
    2. Registration with RBI & Follow up with all RBI requirements
    3. Registration with ROC & Follow up with all ROC requirements 
    4. Fulfillment of other requirements, like PAN, TAN, & registrations as applicable like VAT, Service Tax, IE code etc.   

Compliance of rules & regulations of Reserve Bank of India (R.B.I.)
 It includes dealing with DNBS Department for finance Companies & Companies having implication of FEMA.

We also have a very specialized experience in providing consultancy regarding the Foreign Direct Investment in the Companies.

Filing of returns on timely Basis, as required by R.B.I., as applicable to companies

FEMA and Non-Resident Individuals

Navigating the rules and regulations under FEMA (Foreign Exchange Rules) can often be daunting for Overseas Citizens. (NRI’s) and other non-residents. This guide aims to simplify the key aspects of FEMA as they relate to non-residents, ensuring that you stay compliant while managing your financial and property-related matters in India.

 

What is FEMA?

 

In order to control international financial transactions and encourage the orderly growth of India’s foreign currency market, the Foreign currency Management Act (FEMA) was introduced in 1999. It introduced a more open approach to foreign exchange management and superseded the previous Foreign Exchange Regulation Act (FERRA). All people, including foreign nationals and NRIs, are subject to FEMA, which focuses on investments, current account transactions, and foreign exchange.

Who Qualifies as a Non-Resident?

 

Under FEMA, the residential status of an individual is determined based on the duration of their stay in India. A person is considered a resident if they have stayed in India for more than 182 days during the preceding financial year. Conversely, if the stay is less than 182 days, the individual is categorized as a non-resident.

Key Provisions of FEMA for Non-Residents

Bank Accounts 

. In India, non-residents are permitted to open certain kinds of bank accounts, including:

. Non-Resident External (NRE) Account: This account permits the repatriation of all foreign earnings to India.

. Non-resident ordinary accounts, or NROs, are used to handle dividends and other revenue received in India. A portion of the funds can be repatriated.

. A fixed deposit account kept in foreign currency that provides security against changes in exchange rates is known as an FCNR (Foreign Currency Non-Resident) account.

Investments in India

Real Estate: NRI’s can purchase residential or commercial properties but are restricted from acquiring agricultural land, plantation property, or farmhouses.

Stocks and Mutual Funds: Investment in Indian companies and mutual funds is permitted under the Portfolio Investment Scheme (PIS).

Money Repatriation

FEMA makes it easier for NRI’s to repatriate their money. After paying the necessary taxes, income obtained in India, such as dividends or rent, may be repatriated. Similarly, within certain bounds, the proceeds from the sale of investments and real estate can be sent overseas.

Presents and Succession
Residents may give gifts and inheritances to NRI’s as long as the transfer complies with FEMA regulations. Any money or property that is inherited has to adhere to the applicable tax and reporting regulations.

Borrowing and Lending

NRI’s can lend money to their relatives in India within prescribed limits. They can also borrow funds in specific situations, such as for property purchases or personal requirements, as outlined under FEMA.

Compliance Requirements

 

To avoid penalties, non-residents must ensure compliance with FEMA regulations. Common requirements include:

  • Filing Form 15CA/15CB for repatriation of funds.

  • Adhering to the RBI’s reporting guidelines for investments and property transactions.

  • Paying taxes on income earned in India, such as rental income or capital gains.

Common Mistakes to Avoid

 

  1. Ignoring Tax Implications: Income earned in India is taxable, and failing to comply can result in penalties.

  2. Improper Documentation: Ensure all transactions are well-documented and reported to avoid scrutiny.

  3.  Violating Investment Limits: Adhere to FEMA limits on repatriation and investments to stay compliant

Non-residents must comprehend FEMA requirements in order to properly manage their finances in India. NRI’s can optimize their financial prospects and steer clear of legal issues by remaining aware and following the guidelines. Speaking with an experienced expert might give you much-needed insight if you find the compliance procedure difficult.

Non-residents can successfully manage FEMA’s framework and maximize their financial pursuits in India with the correct strategy.