Indian Startup open overseas account to receive income

Hello,

If you are having an EEFC account, then you can receive export proceeds from your customers in their own currency easily. Some amount of fx losses/gains may accrues in this case but it can't be completely avoided and is still a better option then other modes. 

Moreover, if you try to receive payment through any other route, you may loose exemption from GST liability that you must be presently enjoying.

Third, you are eligible to claim export incentives from GoI at certain percentage of your sale proceeds which would not just compensate for your fx losses but help you earn certain other income.

For detailed discussion and end to end solution regarding this query, I would advice you to take a telephonic consultation.

Best Regards, 

- You can do so but it may attract litigation in future. The entire amount received in foreign currency bank account outside India should be remitted back to your Indian EEFC account (meaning thereby India should not loose the amount of foreign currency which could otherwise be remitted directly to your Indian bank account from your clients). If your bank has any branch outside India or any arrangements with foreign bank accounts, it may be helpful. The entire purpose is that you should not loose the character and benefit of export of services under GST if you are registered under GST and the government should not loose the foreign currency. 

For detailed discussion, you may opt for telephonic consultation.

Since you are doing it as a company there would surely be some permission required.

We need to check FEMA and other regulations also are you deducting TDS on such payment to freelancer or are aware of such provision.

Also you can open an entity outside India also to provide service and plan accordingly.

Hope you find the above information helpful if you do please let rate it 5 and provide your valuable feedback for my improvement.

Thank you

This arrangement may work. For period of 9 months for startup I can not say. It is not illegal to meet overseas expenses from overseas bank account but to establish proper trail of export proceeds, firstly proceeds should be credited in Indian bank account. The issue involves intricacies which we can discuss telephonically.

Hello,

You are right in the fact that there are overseas service providers who provide multi currency account facility from where the funds can be further remitted to India based nostro account. However to ensure that your sales outside India qualify as exports from GST exemption perspective you need to comply with specific procedures and documentation prescribed in this regard which says that receipts from such exports must be received in convertible foreign currency in designated accounts which is an EEFC account ONLY. When you receive your proceeds in this account you get the prescribed FIRC and BRC certificates issued from bank which are essential documents to satisfy export related regulations. Other forex account such as nostro etc are neither recognised accounts in this regard nor eligible to issue given certificates.

Also you can pay for services availed to do these exports from given EEFC account as well. Hope it resolved your query.

Best Regards,