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June 2025Q. 3(d)3 marksSyllabus 2022
(d)Moonlight Inc., a USA-incorporated company, has a branch office in Surat, India, and the company intends to close it. Advise on the procedure for closing the branch office in India, including necessary legal and regulatory steps.
Closure of BO/PO/LO Requests for closure of the BO / LO/ PO and allowing the remittance of winding up proceeds of BO / LO/ PO may be submitted to the designated AD Category - I bank by the BO/ LO/ PO or their nodal office, as the case may be. The application for winding up may be submitted along with the following documents:
a)Copy of the Reserve Bank’s/AD Category-I bank’s approval for establishing the BO/ LO/ PO.
b)Auditor’s certificate:
(i)indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant and indicating the manner of disposal of assets;
(ii)confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc. of the office have been either fully met or adequately provided for; and
(iii)confirming that no income accruing from sources outside India (including proceeds of exports) has remained unrepatriated to India.
c)Confirmation from the applicant/parent company that no legal proceedings in any Court in India are pending against the BO / LO/ PO and there is no legal impediment to the remittance.
d)A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 2013, in case of winding up of the BO /LO in India, wherever applicable.
e)The designated AD Category - I bank has to ensure that the BO / LO/ PO had filed their respective AACs.
f)Any other document/s, specified by the Reserve Bank of India / AD Category- I bank while granting approval.
Remittance of winding up proceeds:
A designated AD Category-I bank may allow remittance of winding-up proceeds in respect of offices of banks and insurance companies, after obtaining copies of permission of closure from the sectoral regulators along with the documents mentioned above.
Accordingly, Moonlight Inc., a USA-incorporated company, is advised.
Source: ICSI Guideline Answers, June 2025, Q. 3(d) (Syllabus 2022).
June 2024Q. 3(e)3 marksSyllabus 2022
(e)A Company registered in Japan had opened the Project Office for setup and commissioning of Coal based Power Plants in India. Due to change in Government policy and promotion of Solar Power projects and other power plants based on renewable energy, the Project Office is not needed. The Nodal Officer in India is instructed by the Management to close the Project Office after due compliances under the Law. Describe the process for closure of Project Office in India opened by foreign entity.
The process for Closure of Project office in India opened by foreign entity is described as follows:
The Requests for closure of the Project Office (PO) and allowing the remittance of winding up proceeds of PO may be submitted to the designated AD Category – I bank by the BO/ LO/ PO or their nodal office, as the case may be.
The application for winding up may be submitted along with the following documents:
a)Copy of the Reserve Bank’s/AD Category-I bank’s approval for establishing the PO.
b)Auditor’s certificate:
(i)indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant and indicating the manner of disposal of assets;
(ii)confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc. of the office have been either fully met or adequately provided for; and
(iii)confirming that no income accruing from sources outside India (including proceeds of exports) has remained unrepatriated to India.
c)Confirmation from the applicant/parent company that no legal proceedings in any Court in India are pending against the BO / LO/ PO and there is no legal impediment to the remittance.
d)A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 2013, in case of winding up of the BO /LO in India, wherever applicable.
e)The designated AD Category - I banks have to ensure that the BO / LO/ PO had filed their respective AACs.
f)Any other document/s, specified by Reserve Bank of India / AD Category- I bank while granting approval.
Source: ICSI Guideline Answers, June 2024, Q. 3(e) (Syllabus 2022).
December 2025Q. 2(a)3 marksSyllabus 2022
(a)CK XH Inc., a Company incorporated in Hong Kong, engaged primarily in the manufacturing and international trading of telecom infrastructure components, proposes to establish a Branch Office (BO) in Guwahati, Assam, with the intent of marketing its products and offering post-sale technical services. The entity has demonstrated profitability in four out of the last five financial years, with the fifth showing a nominal net loss. The company has appointed a local consultancy firm in India to act as its authorized agent for filing the requisite application through an AD Category-I bank. In view of above situation, whether CK XH Inc. is eligible for setting up the Branch Office ?
The eligibility criteria for setting up a Branch Office in India are governed by the Foreign Exchange Management (Establishment in India of Branch Office or Liaison Office or Project Office or any other Place of Business) Regulations, 2016, issued under FEMA, 1999.
Eligibility for setting up a Branch Office
•The applicant company must be a body corporate incorporated outside India;
•The name of the Indian branch office must be the same as the parent company (if the branch office does not have revenue from India operations, its expenses must be met by the head office);
•The net worth of the branch office must not be less than US $100,000; and
•The parent company should have a profit-making record in the immediately preceding five financial years in the home country.
•Application shall be submitted through an AD Category-I Bank.
In cases where the applicant foreign entity does not meet the financial criteria, the parent company may issue a Letter of Comfort (LoC), given the company satisfies the prescribed criteria for net worth and profit.
A person resident outside India permitted by the Reserve Bank under these Regulations to establish a branch or liaison office in India may undertake or carry on any activity specified in Schedule I or II), as the case may be, but shall not undertake or carry on any other activity unless otherwise specifically permitted by the Reserve Bank.
Yes, CK XH Inc. is eligible to set up a Branch Office in India under the automatic route, provided it meets the net worth requirement and submits the application through an AD Category-I bank. For fifth year nominal loss, Letter of Comfort may be filed. CK XH Inc.’s proposed Branch Office activity such as marketing telecom infrastructure components and offering post-sale technical services qualifies under Schedule I of the FEMA (Establishment of Branch Office) Regulations, 2016.
Source: ICSI Guideline Answers, December 2025, Q. 2(a) (Syllabus 2022).
December 2024Q. 2(e)3 marksSyllabus 2022
(e)Global Tech Solutions, a prominent software development company headquartered in the United States, has successfully established its initial branch office in Bengaluru. Following the success of this office, the company has identified the need to establish an additional branch office in Hyderabad to further expand its market presence and enhance service delivery.
What are the critical steps and activities involved in establishing an additional branch office in India for foreign entities like Global Tech Solutions ?
Foreign company must apply for approval from the Reserve Bank of India (RBI) under provisions of the Foreign Exchange Management Act (FEMA), 1999 to open a branch office in India.
If the foreign entity wishes to establish a branch office in more than one location in India, it must register the branch, or seek approval from the RBI for each of the location separately. The RBI approval is also necessary for each activity the branch office intends to undertake in India.
The procedures for registration require a foreign company to deposit the following set of forms:
•FNC form duly signed by authorised representative (AR);
•Information about the parent company along with its certificate of incorporation attested by a Notary Public or the Indian Embassy in the country of registration;
•The incorporation documents of the branch office to be established in India;
•Proof of registered office;
•Note on location or proposed activity;
•The latest audited balance sheet of the applicant entity;
•Board resolution to open a branch office;
•KYC of the authorized signatory; and
•Information about the local representatives of the parent company in the branch office.
Accordingly, Global Tech Solutions must adhere to the aforesaid regulatory guidelines set by the Reserve Bank of India (RBI) to establish an additional branch office in India.
Source: ICSI Guideline Answers, December 2024, Q. 2(e) (Syllabus 2022).
December 2023Q. 2(c)3 marksSyllabus 2022
(c)S&T Corp. is a company registered in Germany. The company desires to open a Branch Office in India. Advise S&T Corp. the activities permitted for a branch office in India of a person resident outside India under the Foreign Exchange Management Act, 1999 read with 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.
Permitted activities for a branch office in India of a person resident outside India under the Foreign Exchange Management Act, 1999 read with 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 i. Export/import of goods; ii. Rendering professional or consultancy services (other than practice of
legal profession in any matter); iii. Carrying out research work in which the parent company is engaged; iv. Promoting technical or financial collaborations between Indian companies and parent or overseas group company; v. Representing the parent company in India and acting as buying/ selling agent in India; vi. Rendering services in Information Technology and development of software in India; vii. Rendering technical support to the products supplied by parent/group companies; viii. Representing a foreign airline/shipping company.
Accordingly, S&T Corp. is advised.
Source: ICSI Guideline Answers, December 2023, Q. 2(c) (Syllabus 2022).
June 2026Q. 2(d)3 marksSyllabus 2022
(d)Nexonova Engineering Corp, a foreign company, operates a Branch Office in Pune.
During the financial year ending 31st March 2026, the Branch Office earned significant profits from its Indian and overseas clients. The Head Office, located in Zurich, now intends to remit 50% of the profit earned in India to its parent company abroad. Before initiating the remittance, the Branch Office wants to ensure full compliance with Indian foreign exchange regulations.
Explain the compliances that the Indian Branch Office must complete before remitting the surplus profit to its foreign Head Office.
Remittances of profit or surplus earned or generated in India, by a Branch Office of a foreign company is permitted, subject to fulfilment of the following conditions:
1.Remittance amount is permitted subject to net of taxes
2.Following documents to be submitted with AD Bank:
(i)Certified copy of audited balance sheet and profit and loss account for the relevant year.
(ii)Chartered Accountant certificate certifying:
(a)the manner of arriving remittable profits
(b)that the remittable profit has been earned by undertaking permitted activities
(c)that the profits do not include any profit on revaluation of assets of the branch.
Once these conditions are satisfied, the Branch Office may remit the surplus profit to its foreign Head Office.
Source: ICSI Guideline Answers, June 2026, Q. 2(d) (Syllabus 2022).
June 2025Q. 2(c)3 marksSyllabus 2022
(c)TelecomGlobal Ltd., a UK-based company, intends to set up a Project Office in the Andaman and Nicobar Islands, India, as part of its expansion into the telecommunications sector. The CEO of TelecomGlobal Ltd., James Anderson, seeks your advice on whether this establishment requires prior approval from the Reserve Bank of India (RBl), considering both the sector-specific regulations governing foreign direct investment in telecommunications and the geographical location of the Andaman and Nicobar Islands.
Does this establishment require prior approval from the RBI ?
As per the provisions of the Reserve Bank of India (RBI), RBI approval is required for setting up a Branch Office, Project Office or Liaison Office in India in the following cases:
(a)The applicant is a citizen of or is registered/incorporated in Pakistan;
(b)The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a BO/LO/PO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands;
(c)The principal business of the applicant falls in the four sectors namely Defense, Telecom, Private Security and Information and Broadcasting;
(d)The applicant is a Non-Government Organization (NGO), Non-Profit Organization, Body/ Agency/Department of a foreign government.
Based on the above, TelecomGlobal Ltd., a UK-based company planning to establish a Project Office (PO) in the Andaman and Nicobar Islands for its telecom business, falls under the category where RBI approval is mandatory.
Source: ICSI Guideline Answers, June 2025, Q. 2(c) (Syllabus 2022).
June 2025Q. 4A(iii)3 marksSyllabus 2022OR, alternative to Q. 4
(iii)How the recent regulatory changes impacted the registration process for foreign companies establishing a business in India ?
The process for foreign companies to register their place of business in India has been updated under the Companies (Registration of Foreign Companies) Amendment Rules, 2024 (MCA Notification No. GSR 491(E) Dated August 12 2024).
Key modifications include:
1.Centralized Filing: The term “registrar” has been replaced with “Registrar, Central Registration Centre,” indicating a shift toward centralized handling of registration documents.
2.Form FC-1 Submission: Foreign companies are now required to submit registration documents in Form FC-1 directly to the Registrar, Central Registration Centre.
3.Timeline: The 30-day deadline for filing Form FC-1 after establishing a place of business in India remains the same.
4.Supporting Documents: The requirement for an attested copy of RBI approval under FEMA (if applicable) or a declaration stating no approval is needed continues to apply.
The Companies (Registration of foreign Companies) Amendment rules 2024 Amendment Rules, 2024, initiate a qualitative shift in India’s involvement in cross-border mergers, potentially enriching the framework and benefiting companies, particularly those with subsidiaries in foreign territories.
Source: ICSI Guideline Answers, June 2025, Q. 4A(iii) (Syllabus 2022).
June 2026Q. 4A(iv)3 marksSyllabus 2022OR, alternative to Q. 4
(iv)Outline the functional role of a Project Office established by a foreign company in India.
Project office means a place of business in India to represent the interests of the foreign company executing a project in India but excludes a Liaison Office. A Project Office serves as a temporary business presence for a foreign company that has secured a specific project in India. Its role is limited to activities directly related to executing that project. It can manage project operations, coordinate with Indian stakeholders, procure materials, hire staff, and oversee implementation. However, it cannot undertake unrelated commercial activities or operate beyond the scope of the assigned project. A Project Office is typically allowed where i. the project is funded directly by inward remittance from abroad; or ii. the project is funded by a bilateral or multilateral International Financing Agency; or iii. the project has been cleared by an appropriate authority; or iv. 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.
This structure enables foreign companies to complete project based assignments efficiently without establishing a full fledged business entity. It ensures compliance with Indian regulations while allowing focused execution of the contracted work.
Source: ICSI Guideline Answers, June 2026, Q. 4A(iv) (Syllabus 2022).