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CMA Final · Corporate and Economic Laws · Foreign Exchange Management Act, 1999

Under the Foreign Exchange Management Act, 1999, the Act applies to branches, offices and agencies outside India in which of the following cases?

FEMA applies to branches, offices and agencies outside India that are owned or controlled by a person resident in India. Section 1(3) extends the Act to them, and to contraventions committed outside India by persons to whom the Act applies. Non-resident ownership or treaty status does not matter.

  1. AThose owned or controlled by a person resident in IndiaCorrect
  2. BThose owned by any foreign national having a place of business in India
  3. CThose registered under the Companies Act, 2013 but wholly owned by non-residents
  4. DThose situated in countries having a double taxation agreement with India

Explanation

Section 1(3) provides that the Act also applies to all branches, offices and agencies outside India owned or controlled by a person resident in India. Ownership by non-residents, or the existence of a tax treaty, is irrelevant to this extended application.

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