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March 2016

A. P. (DIR Series) Circular No. 51 dated February 11, 2016

By Gaurang Gandhi Chartered Accountant
Reading Time 1 mins
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Regulatory relaxations for start-ups – Clarifications relating to acceptance of payments

This
circular clarifies that a start-up with an overseas subsidiary, which
has a appropriate contractual arrangement between itself, its overseas
subsidiary and the customers concerned, is permitted to: –

1. O pen foreign currency account abroad to pool the foreign exchange earnings out of the exports / sales made by it.

2.
Pool its receivables arising from the transactions with the residents
in India as well as the transactions with the non-residents abroad into
the said foreign currency account opened abroad in its name.

3.
Avail of the facility for realising the receivables of its overseas
subsidiary or making the above repatriation through Online Payment
Gateway Service Providers (OPGSPs) for value not exceeding US $ 10,000
or such limit as may be permitted by RBI from time to time.

Balances
in the said foreign currency account that are due to the Indian
start-up must be repatriated to India within a period as applicable to
realisation of export proceeds (currently nine months).

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