RBI Issues New Forex Management (Remittance of Assets) Regulations,
2016
[Notification
No. FEMA 13 (R)/2016-RB dated 1st April 2016]
Sub:
Foreign Exchange Management (Remittance of Assets) Regulations, 2016.
In
exercise of the powers conferred by Section 47 of the Foreign Exchange
Management Act, 1999 (42 of 1999) and in supersession of Notification No. FEMA
13/2000-RB dated May 3, 2000, as amended from time to time, the Reserve Bank
makes the following regulations in respect of remittance outside India by a
person whether resident in India or not, of assets in India, namely:
1.
Short title and commencement:-
i)
These Regulations may be called the Foreign Exchange Management (Remittance of
Assets) Regulations, 2016.
ii)
They shall come into force from the date of their publication in the official
Gazette.
2.
Definitions:-
In
these Regulations, unless the context requires otherwise, -
(i) 'Act' means the Foreign Exchange Management Act, 1999
(42 of 1999);
(ii)
'Authorised Dealer' means a person authorised as an authorised dealer under
subsection (1) of section 10 of the Act;
(iii)
'Non-Resident Indian’ (NRI) shall have the same meaning assigned under the
Foreign Exchange Management (Deposit) Regulations, 2016;
(iv)
‘Person of Indian Origin’ (PIO) shall have the same meaning assigned under the
Foreign Exchange Management (Deposit) Regulations, 2016;
(v)
'Remittance of asset' means remittance outside India of funds representing a
deposit with a bank or a firm or a company, provident fund balance or
superannuation benefits, amount of claim or maturity proceeds of Insurance
policy, sale proceeds of shares, securities, immovable property or any other
asset held in India in accordance with the provisions of the Act or rules or
regulations made there under;
(vi)
the words and expressions used but not defined in
these Regulations shall have the same meanings respectively assigned to them in
the Act.
3.
Prohibition on Remittance outside India of assets held in India:-
Save
as otherwise provided in the Act or rules or regulations made or issued
thereunder, no person, whether resident in India or not, shall make remittance
of any asset held in India by him or by any other person:
Provided
that the Reserve Bank may, for sufficient reasons, permit any person to make
remittance of any asset held in India by him or by any other person.
4.
Permission for remittance of assets in certain cases:-
(1)
A citizen of foreign state, not being a Person of Indian origin (PIO) or a
citizen of Nepal or Bhutan, who
(i) has retired from an employment
in India, or
(ii)
has inherited the assets from a person referred to in
sub-section (5) of section 6 of the Act; or
(iii)
is a widow/ widower resident outside India and has inherited assets of the
deceased spouse who was an Indian citizen resident in India, may remit through
an authorised dealer an amount, not exceeding USD 1,000,000 (US Dollar One
million only) per financial year on production of documentary evidence in
support of acquisition, inheritance or legacy of assets by the remitter
Provided
that for the purpose of arriving at annual ceiling of remittance, the funds
representing sale proceeds of shares and immovable property owned or held by
the citizen of foreign state on repatriation basis in accordance with the
Foreign Exchange Management (Acquisition and transfer of immovable property in
India) Regulations, 2016 and Foreign Exchange Management (Transfer or issue of
security by a person resident outside India) Regulations, 2000 made under the
Act, shall not be included.
Provided
further that where the remittance is made in more than one instalment, the
remittance of all instalments shall be made through the same authorised dealer.
(iv)
had come to India for studies/ training and has completed his studies/
training, may remit the balance available in his account, provided such balance
represents funds derived out of remittances received from abroad through normal
banking channels or rupee proceeds of foreign exchange brought by such person
and sold to an authorised dealer or out of stipend/ scholarship received from
the Government or any Organisation in India.
(2)
A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit
through an authorised dealer an amount, not exceeding USD 1,000,000 (US Dollar
One million only) per financial year,
(i) out of the balances held in the Non-Resident (Ordinary)
Accounts (NRO accounts) opened in terms of Foreign Exchange Management
(Deposit) Regulations, 2016/ sale proceeds of assets/ the assets acquired by
him by way of inheritance/ legacy on production of documentary evidence in
support of acquisition, inheritance or legacy of assets by the remitter;
(ii)
Under a deed of settlement made by either of his parents or a relative
(relative as defined in Section 2(77) of the Companies Act, 2013) and the
settlement taking effect on the death of the settler, on production of the
original deed of settlement;
Provided
that where the remittance under Clause (i) and (ii)
is made in more than one instalment, the remittance of all instalments shall be
made through the same Authorised Dealer.
Provided
further that where the remittance is to be made from the balances held in the
NRO account, the account holder shall furnish an undertaking to the Authorised
Dealer that “the said remittance is sought to be made out of the remitter’s
balances held in the account arising from his/ her legitimate receivables in
India and not by borrowing from any other person or a transfer from any other
NRO account and if such is found to be the case, the account holder will render
himself/ herself liable for penal action under FEMA.”
(3)
An authorised dealer in India may, also allow remittance out of the assets of
Indian companies under liquidation under the provisions of the Companies Act,
2013, subject to the following conditions:
(i) Authorised Dealer shall ensure that the remittance is in
compliance with the order issued by a court in India/ order issued by the
official liquidator or the liquidator in the case of voluntary winding up; and
(ii)
no remittance shall be allowed unless the applicant
submits:-
(a) Auditor's certificate confirming that all liabilities in
India have been either fully paid or adequately provided for.
(b)
Auditor's certificate to the effect that the winding up is in accordance with
the provisions of the Companies Act, 2013.
(c)
In case of winding up otherwise than by a court, an auditor's certificate to
the effect that there is no legal proceedings pending in any court in India
against the applicant or the company under liquidation and there is no legal
impediment in permitting the remittance.
5.
Permission to an Indian entity to remit funds in certain cases:-
(1)
An entity in India may remit the amount being its contribution towards the
provident fund/ superannuation/ pension fund in respect of the expatriate staff
in its employment who are resident in India but not permanently resident
therein.
Explanation:
For
the purpose of this Regulation, -
(a)
'expatriate staff' means a person whose provident/
superannuation/ pension fund is maintained outside India by his principal
employer outside India;
(b)
‘not permanently resident' means a person resident in
India for employment of a specified duration (irrespective of length thereof)
or for a specific job or assignment, the duration of which does not exceed three
years.
6.
Permission for remittance of assets on closure or remittance of winding up
proceeds of branch office/ liaison office (other than project office)
(1)
A branch or office established in India by a person resident outside India may,
for making remittance of assets on closure or remittance of its winding up
proceeds, apply to the Authorised Dealer concerned supported by the following
documents, namely:
(A)
A copy of the Reserve Bank's permission for establishing the branch/ office in
India, wherever applicable;
(B)
Auditor’s certificate:
(i) indicating the manner in which
the remittable amount has been arrived 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 the employees etc., of the branch/
office have been either fully met or adequately provided for;
(iii)
confirming that no income accruing from sources outside India (including
proceeds of exports) has remained un-repatriated to India; and
(iv)
confirming that the branch/office has complied with
all regulatory requirements stipulated by the Reserve Bank of India from time
to time regarding functioning of such offices in India.
(C)
A confirmation from the applicant that no legal proceedings are pending in any
Court in India and there is no legal impediment to the remittance; and
(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 office in India.
(2)
On consideration of the application made under sub-regulation (1), the
authorized dealer concerned may permit the remittance subject to the directions
issued by the Reserve Bank in this regard, from time to time.
7.
Reserve Bank's prior permission in certain cases:-
(1)
A person who desires to make a remittance of assets in the following cases, may
apply to the Reserve Bank, namely:
(i) Remittance exceeding USD 1,000,000 (US Dollar One
million only) per financial year –
(a)
on account of legacy, bequest or inheritance to a
citizen of foreign state, resident outside India; and
(b)
by a Non-Resident Indian (NRI) or Person of Indian
Origin (PIO), out of the balances held in NRO accounts/ sale proceeds of
assets/ the assets acquired by way of inheritance/ legacy.
(ii)
Remittance to a person resident outside India on the ground that hardship will
be caused to such a person if remittance from India is not made;
(2)
On consideration of the application made under sub-regulation (1), the Reserve
Bank may permit the remittance, subject to such terms and conditions as it deem
necessary.
8.
Payment of taxes:-
Any
transaction involving remittance of assets under these regulations shall be
subject to the applicable tax laws in India.