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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

Meera Textiles Pvt Ltd, a Surat company resident in India, owns a sales office in Dubai. A director asks whether FEMA, 1999 has any application to the Dubai office. Which statement is correct as per the Act?

FEMA applies to the Dubai office. Section 1(3) extends the Act to all branches, offices and agencies outside India that are owned or controlled by a person resident in India, and to contraventions committed outside India by persons to whom it applies.

  1. AFEMA applies to the Dubai office because it applies to branches, offices and agencies outside India owned or controlled by a person resident in IndiaCorrect
  2. BFEMA does not apply because it extends only to the territory of India
  3. CFEMA applies only if the Dubai office is registered as a company in India
  4. DFEMA applies only to contraventions committed inside India by Indian citizens

Explanation

Section 1(3) states that the Act also applies to all branches, offices and agencies outside India owned or controlled by a person resident in India, and to contraventions committed outside India by persons to whom the Act applies. Hence the Dubai office is covered; the 'territory only' view ignores this extended application.

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