Opening of Bank Accounts & Foreign Direct Investments (FDI) in India: Clothing & Apparel Industry: Best FDI Attorney Legal Advice in Delhi NCR

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“Many foreign Investors are coming to India and are registering their corporation in India or company in India. However, these foreign investors face a bg challenge in opening their bank account in India, transferring funds internationally and to comply with the Reserve Bank of India compliances in India. Thus, they should obtain a proper legal advice from the best FDI attorney in India and should also ensure the fulfilment of the RBI compliances including the FEMA compliances respectively.”

Introduction
Overseas Corporate Bodies (OCB) or a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) have the permission to open a bank account in India. But the entity or the individual has to find the suitable bank account in par with their needs and to manage money. Below discussed are various type of bank accounts which can be opened by foreigners:

Categories of Bank Accounts which can be opened by Foreign Corporations & Individuals in India are:
1. Resident Foreign Currency Account (RFC): The Resident Foreign Currency Account is designed for returning NRIs who want to invest their foreign currency in India. This type of account is solely managed in foreign currency. This account can function as both a term deposit and a savings account. The money in the account can also be taken whenever it is needed, but interest will only be given if the money is kept for more than a year. The RFC account does not accept Indian cash. The interest earned on the funds is taxed in India. However, if a person is a returning NRI with RNOR status, he or she is free from paying taxes for a period of two years. If person decide to become a Resident, you can deposit funds from the NRE account or FCNR account.

2. Foreign Currency Non-Resident Banks (FCNR): These type of banks are term deposit accounts and it is almost similar to opening of a regular fixed deposit. It is maintained and paid back in the same currency and when it is repatriated outside India there is no conversion of the money happening. It can be maintained four types of currencies which are Euro, Pound Sterling, US Dollar, and Japanese Yen for a period ranging from one year to three years.

3. Non-Resident Ordinarily Account (NRO): A foreign national who is not of Indian origin who is visiting India can create an NRO (current/savings) account with cash transferred from outside India via banking channels or by selling foreign exchange brought into India. The balance amount which is there in the NRO account may be remitted to the account holder after he leaves India if the account has been open for at least six months and has not been credited with any local money other than interest. It can be considered as the NRI’s savings bank account, which can be maintained in either foreign currency or Indian rupees. In this type of bank account can be funded with funds received in foreign currency or rupees earned in India. When an Indian citizen goes abroad for work, his or her local bank account is immediately converted to an NRO account. The funds in the account are usually only usable in India. NRO accounts come in a variety of shapes and sizes, including savings accounts, fixed deposit accounts, and recurring deposit accounts.

4. Non-Resident External Rupee Account(NRE): Only money received from abroad, not local rupee sources, can be used to open an NRE account. There can be a joint account holder, but in that case the joint account holder must be also be a non-resident as well. The funds in this type of account can be freely transferred outside of India without any restrictions or RBI clearance. Because the account is stored in rupees, the Rupee will be exchanged into the required foreign currency at its current exchange rate for repatriation purposes. The fundamental difference between an NRE and an NRO account type is that the NRE account requires just foreign currency to be funded. A one-year minimum maturity time is required for recurring and fixed deposits. The NRI account holder cannot use his power of attorney to open a NRE account but will have to use his own power.

Legal consultation from the best corporate lawyer in India should be obtained before initiating the process of filing papers with the Bank for opening of account.

Conclusion
In case a foreign company or any foreign person wants to invest in India they have to open any bank account depending on which type of bank account will suit their requirement. Proper care and precaution should be undertaken when opening a bank account by foreign companies in India.
Authored By: Adv. Anant Sharma & Afsana Khan