Foreign Currency Account means an account maintained in currency other than the currency of India or Nepal or Bhutan. What is a foreign currency account? Foreign Currency Account (FCA) is a transactional account. Which is denominated in a currency other than the home currency and maintained by a bank in the home country (onshore) or a bank in another country (offshore)? What do you mean by term Foreign Currency Account outside India? Foreign Currency Account outside India means an account opened outside India by Indian person or entity to maintain the foreign transactions. The FCA can be open, held and maintained by the resident in India either in India or Outside India. The Reserve Bank of India has stipulated the guidelines for the opening of foreign currency accounts. Eligibility criteria to open Foreign Currency Account outside India: \t Accounts of authorized dealers or their branches: \tAny Indian entity having its branch or head office or correspondent outside India can open, hold and maintain Foreign Currency Account (FCA) to transact in foreign exchange business and other matters related thereto, in accordance with the provisions of the Act or the rules or regulations made or the directions issued thereunder. \tAny Bank incorporated or constituted in India having its branch Bank outside India can open, hold and maintain with a bank outside India, a Foreign Currency Account (FCA) to carry on normal banking business outside India, which is subject to compliance with the directions or guidelines issued from time to time by the Reserve Bank of India and the regulatory authority in the country where the branch is located. \t Account by a company/ firm in the name of its office/ branch/ representative outside India: \tA firm or a Company or a body corporate registered or incorporated in India can open, hold and maintain in the name of its office or its branch office located outside India or its representative forwarded outside India, a foreign currency account with a bank outside India to operate normal business of the office/ branch or representative. \tThe branch or representative shall operate business activities of the Indian entity. \tThe Indian entity shall remit to all such account within the below limit: \tRemittances made to meet initial expenses of the branch or office or representative:15 % of the average annual sales or income or turnover of the Indian entity during the last two financial years or up to 25 percent of the net worth, whichever is higher. \tRemittances made to meet recurring expenses of the branch or office or representative: 10 percent of average annual sales/ income or turnover during the last financial year. \tThe external branch/ office/ representative shall not enter into any contract or agreement in contravention of the Act. \tThe accounts shall be closed if the Indian entity fails to open a branch within six months of opening the account or representative is not sent for the term of six months. \tThe above remittance ceiling will not applicable in below case: \tThe remittance is made out of funds held in EEFC account of the Indian entity \tThe overseas branch/ office is set up or representative posted by a 100% Export Oriented Unit (EOU) or a unit in Export Processing Zone (EPZ) within two years of establishment of the Unit. \t Exporters: The exporter who commence a construction contract or a turnkey project outside India or who is exporting services or engineering goods from India on deferred payment terms may open, hold and maintain a Foreign Currency Account. Provided the approval is taken from Foreign Exchange Management (Export of goods and services) Regulations, 2015 and complied with the terms and conditions of the approval letter. \t Overseas Direct Investment: An Indian party may open, hold and maintain Foreign Currency Account abroad for the purpose of making overseas direct investments provided compliance with below conditions: \tThe Indian party is eligible for making overseas direct investment \tThe account shall be opened, held and maintained as per the regulation of the host country. \tThe remittances sent to the account by the Indian party should be utilized only for making overseas direct investment \tAny amount received in the account by way of dividend and/ or other entitlements from the subsidiary shall be repatriated to India within 30 days from the date of credit. \tThe Indian party should submit the details of debits and credits in the account on the yearly basis. \tThe account so opened shall be closed immediately or within 30 days from the date of disinvestment. Other Cases: \tRaising money through ECB, ADR, and GDR. \tA shipping or airline company incorporated in India may open, hold and maintain with a bank outside India, a Foreign Currency Account to undertake transactions in the ordinary course of its business. \tLife Insurance Corporation of India or General Insurance Corporation of India and its subsidiaries may open, hold and maintain with a bank outside India, a Foreign Currency Account to meet the expenditure incidental to the insurance business carried on by them. \tResident individuals may open, maintain and hold foreign currency accounts to make remittances under the Liberalised Remittance Scheme \tA person resident in India who has gone out of India to participate in an exhibition/ trade fair outside India may open, hold and maintain a Foreign Currency Account. \tIndia person visited abroad for studies may open, hold and maintain a Foreign Currency Account during his stay outside India. \tA person resident in India who is on an official visit to a foreign country may open, hold and maintain a Foreign Currency Account during his stay outside India. \tA citizen of a foreign State, resident in India, being an employee of a foreign company, employed by a foreign company.