10

Part III: Establishment of Branch Office (BO)/ Liaison Office (LO) / Project Office
(PO) or any other place of business in India by foreign entities

Applications from foreign companies (a body corporate incorporated outside India, including
a firm or other association of individuals) for establishing BO/ LO/ PO in India are considered
by the AD Category-I bank as per the guidelines issued by Reserve Bank of India under the
provisions of Foreign Exchange Management Act, 1999.

The reporting requirements are given below:

1. Annual Activity Certificate

i. The Annual Activity Certificate (AAC) (Annex I) as at the end of March 31 along
with the audited financial statements including receipt and payment account are
required to be submitted to the designated AD Category – I bank and a copy of
the same to the Director General of Income Tax (International Taxation), Drum
Shape Building, I.P. Estate, New Delhi 110002, by the BO/LO on or before
September 30 of every year. In case the annual accounts of the BO/LO are
finalized with reference to a date other than March 31, the AAC along with the
audited financial statements may be submitted within six months from the due
date of the Balance Sheet to the designated AD Category – I bank with a copy to
the Director General of Income Tax (International Taxation), Drum Shape
Building, I.P. Estate, New Delhi 110002.

The AAC is to be submitted by the:

a. BO/ LO concerned, in case of a sole BO/ LO;

b. Nodal office of the BOs/ LOs, in case of multiple BOs / LOs - a combined
AAC in respect of all the offices in India.

ii. AAC from a Chartered Accountant showing the project status and certifying that
the accounts of the project office have been audited and the activities undertaken
are in conformity with the general/ specific permission given by Reserve Bank of
India may be submitted by the PO to the designated AD Category-I bank.
2. AD Category-I bank shall send a consolidated list of all the BOs/LOs/ POs opened and
closed by them during a month (as per Annex II), by the fifth of the succeeding month,

10
The AAC modified vide Notification No. FEMA 22 (R)/2016-RB dated March 31, 2016.

43
 to the General Manager, Reserve Bank of India, Central Office Cell, Foreign Exchange
Department, Sansad Marg, New Delhi-110 001.
11
3.
12
4.
5. Entities from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau or
Pakistan which are setting up a BO/LO/PO in India should register with the state police
authorities and are required to submit an annual report (as per Annex III) within five
working days of the BO/LO/PO becoming functional to the Director General of Police
(DGP) of the state concerned in which the BO/LO/PO has established its office; If there
is more than one office of such a foreign entity, a separate annual report is required to
be submitted to each of the DGP concerned of the state where the office has been
established.

11
Deleted vide AP (DIR Series) Circular No.05 dated November 13, 2020. Prior to deletion, it read as “Extension of LOs granted by the
AD Category-I banks must be intimated to the General Manager, Reserve Bank of India, CO Cell, New Delhi along with the reference
number of the original approval letter and the UIN.”
12
Deleted vide AP (DIR Series) Circular No.05 dated November 13, 2020. Prior to deletion, it read as “Extension of PO has to be
reported by the AD Category-I bank to the Central Office Cell, Foreign Exchange Department, Sansad Marg, New Delhi-110 001.”

44
 13
Annex I
Annual Activity Certificate

To whomsoever it may concern

This is to certify and confirm that during the period from __________________ to
________________, the branch office/ liaison office/ project office with PAN No.(wherever
applicable) ---------------------- of M/s__________________ (UIN-_______________
(wherever applicable) has/ have undertaken only those activities that have been specifically
permitted by the Reserve Bank/ Authorised Dealer Category-I bank vide its approval letter/s
No/s. ______________________________dated ______________and has/have complied
with the terms and conditions specified in the above mentioned letter/s.

For Project Office only

2. Project status: ______________________________________________________
___________________________________________________________________

3. This is to certify that during the period from _______________ to ______________, no

inter-project funds transfer has been carried out without prior approval of the Reserve Bank.
______________________________
(Signature of the Statutory Auditor/s)

(Name of the Chartered Accountant)

ICAI Membership No.:

Address:

Place:
Date:

13
Modified vide Notification No. FEMA 22 (R)/2016-RB dated March 31, 2016

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