An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons Posted in U.N. organisations and official deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs).
Who is a person of Indian Origin?
A. For the purposes of Availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India :
A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin, if,
he, at any time, held an Indian passport, or
he or either of his parents or any of his grand parents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).
Note : A spouse (non being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses.
B. For investments in immovable properties:
A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal), is deemed to be of Indian origin if,
he held an Indian passport at any time, or
he or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
What is an OCB?
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of atleast 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which atleast 60% of the beneficial interest is irrevocable held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees, The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be atleast 60%.
Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRIs?
Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body/trust is required to furnish a certificate from an overseas auditor/chartered accountant/certified public accountant in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees.
Various Facilities Extended to NRI/OCB in our Country
NRIs/OCBs are granted the following facilities:
Maintenance of bank accounts in India.
Investments in securities/shares of, and deposits with, Indian firms/companies.
Investments in immovable properties in India.
In the ensuing pages we will discuss in more detail the above noted facilities and the terms and conditions under which these are extended
[Source: Reserve Bank of India]
Recent Updation
Derecognition of Overseas Corporate Bodies as an Investor Class
Vide A.P.(DIR Series ) Circular No.14 (Sep 16, 2003), RBI has advised that It has been decided in consultation with the Government, to derecognise Overseas Corporate Bodies (OCBs) in India as an eligible 'class of investor' under various routes/schemes available under extant Foreign Exchange Management Regulations.
This decision is a follow up of the review of investment activities of OCBs in India, carried out by Reserve Bank on the basis of the recommendations of the Joint Parliamentary Committee on Security Market Scam. On the basis of the said review, it has been decided in consultation with the Government that: (a) the ban imposed on OCBs under Portfolio Investment Scheme (PIS) in November 2001 shall continue, (b) OCBs as a 'class of investor' entity shall not be allowed to make fresh investments in India under various routes/schemes available under extant Foreign Exchange Management Regulations and facility of opening fresh NRE and FCNR (B) and NR(O) accounts shall also be withdrawn and (c) unincorporated entity also shall not be allowed to make fresh investments under Foreign Direct Investment Scheme including the Automatic Route.
RBI has further stated that Accordingly, it has been decided that with immediate effect -
An unincorporated entity and OCB shall not make fresh investment under FDI Scheme (including Automatic Route). However, the unincorporated entities and OCBs may continue to hold shares and convertible debentures till they are sold / redeemed. OCBs shall not undertake purchase of shares / convertible debentures on non-repatriation basis. However, the OCBs may continue to hold the shares / convertible debentures purchased on non-repatriation basis till they are sold / redeemed. OCBs shall not undertake purchase of Government dated securities or treasury bills or units of domestic mutual funds or units of Money Market Mutual Funds in India or National Plan / Savings Certificates both on repatriation and non-repatriation basis. However, the OCBs may continue to hold these securities till they are sold. A person resident outside India including OCBs shall not transfer by way of sale or gift, the shares or convertible debentures held by them to another OCB. OCBs shall not purchase equity or preference shares or convertible debentures offered on right basis by an Indian company. A person resident in India shall not borrow in foreign currency from OCBs. An Indian company shall not borrow in rupees on repatriation and non-repatriation basis from OCBs by way of investment in Non-convertible Debentures (NCDs). An Indian company, a proprietorship concern or a firm in India shall not accept deposits from OCBs on non-repatriation basis. OCBs shall not open and maintain Non-Resident (External) Rupee Account (NRE), Foreign Currency (Non-Resident) Account (Banks) [FCNR(B)] Accounts and Non-Resident Ordinary Rupee (NRO) Deposit Account with Authorised Dealers in India. All existing NRE (Savings, Current) Accounts of the OCBs (other than the accounts referred to in para 4 below) shall be closed forthwith and balances repatriated strictly as originally authorised, expeditiously. The existing NRE Deposits (Recurring or Fixed), FCNR (B) Accounts and Non-Resident Ordinary Rupee (NRO) Deposit (Recurring or Fixed) Account may be permitted to continue till original maturity. The maturity proceeds of NRE Deposits and FCNR (B) shall be repatriated expeditiously. No new NRE / FCNR / NRO Accounts in the name of OCBs shall be opened and no renewal of deposits shall be made .
|
