Get Your Foreign Bank Account Without Setting Up a Company

A Game-Changer for Exporters:

Managing foreign exchange has always been a challenge for exporters in India. With the new RBI rules for exporters, from managing advance payments in multiple currencies to handling import payments, businesses often face unnecessary hurdles and forex exposure.

But there’s good news — Reserve Bank of India permitted Indian companies to open foreign currency bank accounts overseas without having any physical presence outside India!

What This Means for Exporters:

As per the recent RBI notification for exporters issued under FEMA guidelines, Indian resident exporters can now maintain an overseas bank account to receive export proceeds or advance payments for goods and services. These funds can also be used to make import payments into India, giving exporters greater flexibility in managing their working capital and mitigating foreign exchange risks.

Any unutilised balance in the account must be repatriated to India within:

• Three months if the account is maintained with a bank in an International Financial Services Centre (IFSC), or
• By the end of the next month for accounts in other jurisdictions.

This change represents a significant improvement for IFSC accounts. Earlier, balances held in accounts under the IFSC framework had to be utilised or repatriated within one month.

Additionally, for EDPMS and IDPMS reconciliation under the new regulations of RBI, foreign bank accounts will now play a role, thereby improving efficiency and facilitating smoother cross-border transactions.

Why This Is a Game-Changer:

1. Efficient Forex Management: Exporters can now manage funds in the currency of their choice, reducing the impact of exchange rate fluctuations.
2. Simplified Trade Operations: Businesses can pay overseas suppliers directly, improving cash flow and operational efficiency.
3. Support for Local Customer Payments: Exporters can receive payments in their customers' local currency, making cross-border transactions smoother.
4. Flexibility in Sanctioned Jurisdictions: Transactions through certain sanctioned jurisdictions are allowed, subject to compliance with permitted HSN codes and designated banks.

How We Can Help:

For exporters navigating EDPMS/IDPMS transactions or looking for guidance on operating in sanctioned jurisdictions, expert support is crucial. At KDP Accountants, our team of professionals can help you streamline operations and ensure full compliance with regulatory requirements.

This RBI liberalisation is a progressive step, empowering Indian exporters with enhanced tools to manage foreign exchange and facilitate international trade more efficiently.

For any professional assistance with FEMA compliance, EDPMS/IDPMS reconciliation, or understanding the new RBI rules, connect with us at enquire@kdpaccountants.com.