Foreign currency accounts in India for Project Offices

There has   been considerable relaxation in opening and maintenance of Foreign currency accounts in India by the project offices set up in India by foreign companies. Authorised Dealer Banks (AD) are authorised to open these accounts and permit intermittent remittances subject to the following :

i) Account should be non interest bearing foreign currency account in the name of project office.

ii) Project office has been established in India with general / specific approval of RBI and requisite approval from Project sanctioning authority concerned.

iii) Contract relating to the project specifically provides for payment in foreign currency.

iv) Each project Office may open one foreign currency account and additionally another foreign currency account( usually one in USD and another in their home currency)

v) Payment of project related expenditure may be debited to the foreign currency account

vi) Foreign currency receipts from project sanctioning authority and remittances from parent / group company or international financing ageny can be credited to this account.

vii) The foreign currency account has to be closed at the completion of the project.

viii) Intermittent remittances from the account will be permitted by AD on the project office submitting Auditor's certificate to the effect that sufficient provisions have been made to meet the liabilities in India including Income tax etc. Project office should give an undertaking that any shortfall of funds for meeting the liability in India will be met by inward remittance from abroad.