Draft FEM (Establishment in India of a branch or office) Regulations, 2025 vs FEM (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016
The Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016 have been the governing framework for foreign entities establishing Branch Offices (BOs), Liaison Offices (LOs), Project Offices (POs), or other business entities in India. Now, the Reserve Bank of India, on 3rd October, 2025, published Draft Foreign Exchange Management (Establishment in India of a branch or office) Regulations, 2025 proposing several clarifications, procedural updates, and operational guidelines to streamline and modernize the framework. The 2025 draft keeps the core eligibility and operational principles of FEMA 2016 but streamlines processes, strengthens reporting and compliance, formalizes closure and appeal mechanisms, and assigns explicit responsibilities to designated banks. It is designed to make foreign office establishment in India more transparent and accountable while retaining flexi...