Legal
Notes_5
RBI permits foreign companies to set up branch offices
in SEZs
Foreign companies have been permitted by the Reserve
Bank of India to establish branch offices or units
in Special economics Zones (SEZs) to undertake
manufacturing and service activities subject to
fulfilling certain conditions.
RBI has decided to grant a general permission
of such units function in those sectors where 100
percent FDI is permitted, provided they comply
with part XI of the Companies Act and function
on a ‘stand-alone’ basis. the central
bank said in a notification.
In the event of winding-up of business and for
remittance of such proceeds, the branch or unit
should approach an authorised dealer with documents
prescribed under the FEMA Act, it said.
[ Source: Press Trust of India 19th Jan, 2004.]
