Sitting fees / commission due to non-resident Directors of Indian Companies

Where sitting fees / commission is to be paid / remitted to non-resident Directors of Indian Companies, such Companies should obtain prior permission of the Reserve Bank u/s. 30 of FERA, 1973 for payment to such persons as Directors, where remittance is of savings out of sitting fees, an application should be made to Reserve Bank on Form A2 along with a certificate by the Company confirming the payment of sitting fees. Similarly, application for remittance of commission should also be made on Form A2 to the Reserve Bank together with a certified copy of the Audited Accounts of the company, Work Sheet showing how the commission is arrived at and income-tax clearance certificate. In both cases, reference should be made to the Reserve Bank of India for approval u/s. of FERA, 1973.

Legacies, bequeaths / inheritance

Applications for remittance on account of legacies, bequeaths or inheritance by foreign nationals permanently resident outside India should be submitted to the Reserve Bank on Form LEG with particulars / documents listed thereon. Since legacies, bequeaths are considered as capital funds, the request for transfer of such assets will be considered only within the quota laid down from time to time for repatriation of capital assets from India.

Prize Money from State Lotteries etc.

Foreign nationals will not be permitted to remit outside India their winnings in State Lotteries, Horse racing or similar activities in India.

Repatriation of capital invested in India

Repatriation of investments made in India with the approval of Government of India / Reserve Bank is permissible. Actual remittances will be permitted subject to fulfillment of conditions as to the quantum and installment of repatriation applicable from time to time.

Application for repatriation of such capital invested in India may be made to the Reserve Bank through an authorized dealer together with the following information / documents:-

(1) Whether any undertaking was given at any time to the Government of India or Reserve Bank not to seek repatriation facilities.

(2) Number and date of Reserve Bank’s approval for the disinvestment.

(3) Documentary evidence in support of the disinvestment proceeds.

(4) Whether the investor was ever resident in India and if he was, particulars of foreign exchange availed of at the time of leaving India and thereafter (Applicable only to individuals).

(5) A ‘No Objection / Clearance Certificate’ from the Indian Income-tax Authorities.

(6) A certificate obtained from a Chartered Accountant or the concerned Company’s Secretary to the effect that the shares along with necessary transfer forms have been received by the transferee or his agent and / or lodged with the Company for registration in favor of the transferee. This is applicable only to transfers of bulk holding i.e., where shares to be transferred are more than Rs. 100,000/- of face value or 5% of the Company’s paid up capital by private arrangement (i.e., not through Stock exchange).
 

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