Saturday, February 13, 2016

Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments



It is clarified that:

a.     A start-up in India with an overseas subsidiary is permitted to open foreign currency account abroad to pool the foreign exchange earnings out of the exports/sales made by it;
b.    The overseas subsidiary of the start-up is also permitted to 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 the name of the start-up;
c.     The balances in the said foreign currency account should be repatriated to India within a period as applicable to realisation of export proceeds (currently nine months);
d.    A start-up is also permitted to 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 USD 10,000 (US Dollar ten thousand); and
e.     To facilitate the above arrangement, an appropriate contractual arrangement between the start-up, its overseas subsidiary and the customers concerned should be in place.

Based on RBI Circular dt 11/02/16. Please visit www.rbi.org.in for any further clarification if required…..       Poppy