15 January 2018 • bsamrishindia.com
There is a two-stage registration process for a Liaison / Branch office (Foreign Companies) of a foreign Parent Company. First is RBI approval and the second is registration with the Registrar of Companies (RoC). The license is given for three years and thereafter, it requires renewal. Closure of these foreign companies in India requires RBI approval and a report from RoC as to the state of compliances.
A. Application with AD Category – I bank.
An application be made with the designated AD Category – I bank for closure of Branch/Liaison office. The application is to be supported by the following documents:
- Permission/ Approval letter received from RBI for establishing Branch/ Liaison office.
- Confirmation from parent company that no legal proceedings in any court in India are pending and legal impediments to the remittance.
- A report from the Registrar of Companies regarding compliance with Companies Act, 2013
- Auditors Certificate on:
- The manner of arriving remittable amount supported by statement of assets and liabilities
- Confirmation that all liabilities including gratuity and employee benefits have been paid or provided for
- Confirmation no income accruing from sources outside India including from exports has remained un-repatriated to India.
- Any other documents as may be required by RBI.
B. Remittance of winding up proceeds:
Remittance of winding up proceeds i.e. remittance of assets of branch or liaison office established in India shall be governed by the guidelines issued under Foreign Exchange Management (Remittance of assets) Regulations. Designated AD Category-I bank may allow remittance of winding up proceeds after receiving application of closure of branch office along with the documents mentioned above.
At the end, designated AD Category – I bank will report to the Reserve Bank (the Regional Office concerned for LOs and Central Office for BOs), along with a declaration stating that all the necessary documents submitted by the BO / LO have been scrutinized and found to be in order for closure of Branch Office.
- Registering a Branch Office in India
- Registering a Liaison Office in India
- Liason office / Branch office vs. Wholly owned Subsidiary
- Strike-off of companies
- Incorporating Wholly Owned Subsidiary
- Notification No. FEMA 22(R)/2016-RB dated March 31, 2016 on Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016
- Companies Act, 2013
- General Circular No. 01/2017,“F.No. 1/23/2013-CL-V” dated 22nd Feb 2017 notification on Section 391(2) closure of place of business by a Foreign Company
- Notification No. FEMA 13 (R)/2016-RB Foreign Exchange Management (Remittance of Assets) Regulations, 2016