1. General Permissions:
Reserve Bank has granted general permission to foreign companies to establish Project Offices in India, provided they have secured a contract from an Indian company to execute 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 criteria are not met, the foreign entity has to approach the Reserve Bank of India, Central Office, for approval.
2. Opening of Foreign Currency Account:
AD Category – I banks can open non-interest bearing Foreign Currency Account for Project Offices in India subject to the following:
- The Project Office has been established in India, with the general / specific permission of Reserve Bank, having the requisite approval from the concerned Project Sanctioning Authority concerned.
- The contract, under which the project has been sanctioned, specifically provides for payment in foreign currency.
- Each Project Office can open two Foreign Currency Accounts, usually one denominated in USD and other in home currency, provided both are maintained with the same AD category–I bank.
- The permissible debits to the account shall be payment of project related expenditure and credits shall be foreign currency receipts from the Project Sanctioning Authority, and remittances from parent/group company abroad or bilateral / multilateral international financing agency.
- The Foreign Currency accounts have to be closed at the completion of the Project.
3. List Documents required:
- Certificate of Incorporation of the entity
- MOA and AOA duly apostilled and attested in the country of registration
- Board Resolution as stating the opening respective Project.
- Letter from Company as opening a Bank Account
- RBI permission letter
- Authorization person proofs
- Address copy of the Project were situated
- Current Audited Financial Statements of the Parent Company
Validity of Period of Project Office in India
A Project Office remains valid for the complete tenure of the project till it is completed or wound up.