Foreign companies have been permitted by Reserve Bank of India to establish branch offices or units in special economic zones (SEZs) to undertake manufacturing and service activities subject to fulfilling certain conditions.The Reserve Bank of India has decided to grant a general permission if such units function in those sectors where 100 per cent foreign direct investment (FDI) is permitted, provided they comply with Part XI of Companies Act and function on a ‘stand-alone’ basis, the central bank said in a notification here on Sunday.In the event of winding-up of business and for remittance of such proceeds, the branch or unit should approach an authorised dealer with documents prescribed under the Fema Act, it said.The auditor’s certificate should indicate the manner in which the remittable amount has been arrived, supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets, it said. It should confirm that all liabilities in India, including arrears of gratuity and other benefits to employees of the branch office have been either fully met or adequately provided for and that no income accruing from sources outside India (including proceeds of exports) has remained unrepatriated to the country.
