Earlier, to open the branch, liaison or project offices, a foreign entity needed to seek permission from the Reserve Bank of India. However, foreign entities seeking to open branch, liaison or project offices for critical sectors such as defence, telecom, private security, information and broadcasting and non-government organisation will have to come through the RBI nod, according to a government order.
“It has now been decided that except for a few sectors viz defence, telecom, private security, information and broadcasting and non-government organisation and except a few countries, the power to grant approvals for establishment of Branch Office (BO)/Liaison Office (LO)/Project Offices (PO) in India by foreign entities, would be delegated to the Authorised Dealers Category-I Banks,” a statement issued by the Ministry of Finance said.
Further, anyone who has been awarded a contract for a project by a government authority or a public sector undertaking will, henceforth, be automatically given approval to open a bank account, it said.
The foreign entities can set up their BO/LO/PO in India without registering themselves as companies/trusts under Indian laws, the statement said.