Account Opened by Foreign Nationals and Foreign Tourists

Q.1. Can foreign tourists open a bank account in India during their short visit?

A. Yes. Foreign tourists during their short visit to India can open a Non-Resident (Ordinary) Rupee (NRO) account (Current / Savings) with any Authorised Dealer bank dealing in foreign exchange. Such account can be opened up to a maximum period of 6 months.

Q.2 What are the documents required for opening such accounts?

A. Passports and other valid identification proofs are required for opening the accounts. Authorised Dealer banks are also required to follow the Know Your Customer norms while opening of the accounts.

Q.3. What credits can be made to such accounts?

A. Funds remitted from outside India through banking channel or those obtained by sale of foreign exchange brought by the tourists to India can be credited to the NRO account.

Q4. Can the NRO account be used for making local payments?

A. Yes. Tourists can freely make local payments through the NRO account. All payments to residents exceeding INR 50,000 can be made only by means of cheques / pay orders / demand drafts.

Q.5. Can foreign tourists repatriate the balance held in their NRO account at the time of departure from India?

A. Authorised Dealer banks have been allowed to convert the balance in the account for payment to the account holder at the time of departure from India into foreign currency, provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.

Q.6. What can be done to repatriate the proceeds of an account that has been maintained for more than six months?

A. In such cases, applications for repatriation of balance may be made on plain paper to the Foreign Exchange Department of the Regional Office concerned of the Reserve Bank through the Authorised Dealer bank maintaining the account.

Q.7. Can foreign nationals resident in India open resident account?

A. Yes. Foreign nationals resident in India can open and maintain a resident Rupee account in India in terms of Notification No.5/2000-RB dated May 3, 2000 viz., Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time.

Q.8. Can AD Category-I banks remit proceeds of such accounts on closure?

A. Yes. But AD Category-I banks should ensure that the funds to be repatriated outside India were either received from abroad or they are repatriable in nature or permissible in terms of RBI notification No. FEMA 13/2000 dated 3rd May 2000, as amended from time to time. The foreign nationals employed in India holding valid visas are eligible to maintain resident accounts with an Authorised Dealer Category - I (AD Category-I) bank in India. In order to facilitate such foreign nationals to collect their pending dues in India , AD Category-I banks may, permit foreign nationals to re-designate their resident account maintained in India as NRO account on leaving the country after their employment to enable them to receive their pending bonafide dues, subject to conditions.

Person resident in India means:

1. A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include :
A person who has gone out of India or who stays outside India, in either case
a. For or on taking up employment outside India, or
b. For carrying on outside India a business or vocation outside India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
A person who has come to or stays in India, in either case, otherwise than
a. For or on taking up employment in India, or
b. For carrying on in India a business or vocation in India, or
c. For any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

2. Any person or body corporate registered or incorporated in India,

3. An office, branch or agency in India owned or controlled by a person resident outside India, 

4. An office, branch or agency outside India owned or controlled by a person resident in India;


Overview of NRI Banking in India:-

S.No. Non Resident Indian Bank Accounts in India:-
1 General features of NRI banking accounts:-
Loan facility is available to NRI for the purpose of housing, car and also personal loans are available against deposits or other forms of securities. Bank overdraft facility is provided to NRI accounts.
Joint account holding facility is available and is subjected to conditions.
Nomination facilities are available to NRE, NRO, and FCNR (B), accounts.
Power of Attorney can be held over an account but his rights of operation over the account are limited.
On the return of NRI to India the account will be converted into regular Indian accounts (like RFC) and will function with previous rate of interest if the deposit has not reached its maturity.
All features are mentioned on a generalized basis and features of each account are regulated by RBI from time to time.
2 Documents required for opening an NRI banking account:-
The documents mentioned below are in general. The bank may demand for other specific documents depending on the bank and type of account.
Passport size photograph with a signature across the photo
Utility bills, photocopy of passport with foreign residence address, photocopy of driving license or any relevant document as a proof of address to foreign residence
Photocopy of passport
Photocopy of Visa
All the copies will have to be attested by Embassy of India or any other overseas banker.

3 Providers of NRI banking accounts in India:-
ICICI
Axis bank
HDFC
HSBC
SBI
CITI bank
Standard Chartered bank
Canara bank



SEZ: Special Economic Zone (SEZ) is a geographical region that has economic laws different from a country’s generally applicable economic laws, with the underlying objective being an increase in economic growth and activity through increased foreign investment.

Globally, establishment of SEZs have revolved around achieving the following basic objectives:

Q Economic growth and development – through exports and backward integration

Q Foreign Investment

Q Infrastructure development

Q Employment generation

Q Up-gradation of managerial and technical skills

Achievement of the above objectives through SEZs is typically facilitated through the following -

Q Income tax Holidays

Q Hassle Free Environment

Q Exemption from Indirect duties and taxes

Q No currency restrictions

Q Relaxed foreign investment norms

Q Excellent infrastructure facilities



Fiscal Incentives
Period Amount
Income Tax Holiday (Units In Sez) For first five years 100% of the eligible profits or gains
Next five years 50% of the eligible profits or gains
Next five years 50% of the eligible profits or gains subject to creation or specified reserve
Income Tax Holiday (Developer) Deduction of 100% of profits derived from developing a SEZ for a Period of 10 consecutive assessment years out of the first 15 years from the year in which the SEZ is notified by the Central Government
Capital Gain Exemption from capital gains or transfer or specified assets in Consequence to shifting of industrial undertaking from urban or other areas to SEZ subject to certain conditions.
Dividend Distribution Tax Taxable finance Act 2011
Minimum Alternate Tax Taxable finance Act 2011
Customs Duties Exemption from customs duties for development of SEZ for authorized operation approved by BOA
Service Tax Exemption from Service Tax under chapter VI of the Finance Act 1994 on taxable services provided to a developer or unit to carry on authorized Operation in an SEZ
Securities Transaction Tax Exemption from the Securities Transaction Tax leviable under Section 98 of the Finance (No.2) Act 2004 in case the taxable securities transactions are entered into by a non-resident through the International Finance Service.
Import Duty Duty free Import domestic procurement of goods for development, Operation & maintenance of SEZ units.
Excise Duty Exemption from any duty or excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorized operations by the Developer or entrepreneur.
Central Sales Tax/VAT Exemption from Central Sales Tax/VAT on sale or purchase or goods


Who can set up an SEZ



Approval Procedure For SEZ



Type of SEZ

Free trading & warehousing zones Sez for multi-product2(za) of sez rules, 2006 Sez for sector specific 2(zb) of sez rules, 2006 Sez in a port or airport 2(zc) of sez rules,2006
Free trading and warehousing is a special category sez with a focus on trading and warehousing. The objective of such zone is to create trade related infrastructure to facilitate import and export and import of goods and services with freedom to carry out trade transactions in free currency. In a stand alone Free Trading and Warehousing Zone at least 50% of the area shall be earmarked for developing processing area , free trading and warehousing may also be set up as a part of SEZ for multi product [notification no G.S.R 470(E) dated 10-08-2006] Special Economic Zone for multi-product” means a Special Economic Zone. where Units may be set up for manufacture of two or more goods in a sector or goods falling in two or more sectors or for trading and warehousing or rendering of two or more services in a sector or rendering of services falling in two or more Sector. Special Economic Zone for specific sector” means a Special Economic Zone meant exclusively for one or more productsin a sector or one or more services in a sector. “Special Economic Zone in a port or airport” means a Special Economic Zone in an existing port or airport for Special Economic Zone in an existing port or airport for Special Economic Zone.


Activity in SEZ

Manufacturing / Trading Service
• Apparel, Garments & Leather
• Automobile and Auto Components
• Engineering - Light, Heavy & Application
• Pharmaceuticals
• Food Processing
• Telecom Equipment
• Computer Hardware & micro- electronics
• Consumer Electronics & Appliances
• Gems, Jewellery & Diamonds
• Wood, Rubber, Plastic &
• Leather Products
• Handicrafts
• IT enable services Biotechnology
• R & D Services
• Health Care
• Financial Services
• Knowledge (Education) Services
• Entertainment, Leisure & Recreation
• Sports & Related Activities
• Organized Retail
• Business Services (Convention / Exhibition)
• Warehousing & Trade Related Services


Areas Specification for SEZ

Minimum area requirement stipulated for various categories of SEZs are:



Note

• 1 hectare = 2.421 acres = 10,000 sq.metres
• 1000 hectares = 2500 acres



Setting up of an unit in SEZ



Check List of Letter of Approval

1. Whether the application has been submitted in 3 copies and duly completed in all respects.
2. Is project report submitted in 3 copies ?
3. Application Fee paid ?
4. Is DD in favour of Pay & Accounts Officer, Ministry of Industry, New Delhi ?
5. Is evidence for buy-back/marketing tie-up furnished.
6. Is the project included in Schedule I or Schedule II
7. Has the undertaking in the application been signed.
8. Is the list of imported/indigenous capital goods given ?
9. Is list of imported/indigenous Raw Material given?
10. Does the Project Cost and Pattern of Investment tally ?
11. Is area and water requirement furnished (SEZ) ?
12. Are the names and addresses of Directors given ?
13. Is present activity of the applicant given ?
14. Whether details of manufacturing process given ?
15. Is projected Profit & Loss statement given?
16. Is IE Code detail given in case of existing exporter ?
17. Is ITC HS Code of the product given ?
18. Is the application signed in all the pages ?
19. Is the copy of the lease deed executed for minimumfive years furnished ? (in case of EOUs) ?
20. Whether E-mail address is given ?
21. Whether Dollar-conversion rate is given ?
22. Whether foreign technology agreement, if any, is as per RBI guidelines.
23. Is applicant a company, whether partnership deed/ memorandum of articles/certificate of incorporation given.
24. Whether any sector-specific restriction ? (ex. Rice, granite, petroleum etc.)
25. Whether Fact-Sheet duly filled in and signed submitted ?(in case of conversion units)
26. Whether EP & NFEP projected fulfils stipulation of EXIM Policy (Appendix I).
27. Whether self-certified copy of PAN is enclosed.
28. Whether IT return of previous year enclosed.
29. Whether source of finance indicated.

Record Appeals

A Records & Returns

The SEZ units and developers are required to maintain proper accounts financial year wise in respect of
• Goods imported, procured from DTA,
• Consumption and utilization of goods,
• Reduction of goods including by products, wastes or scrap or remnants.
• Records in respect of disposal of goods by way of exports, sales or supplies in DTA or transferred to EOU/EHTP/STP/BTP and balance in stock are also to be maintained.


Submission of Annual Performance Reports

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