Explore The Criteria For Residential Status Under FEMA 1999

MCQ SELF CHALLENGE #0084

The Residential Status As Per Foreign Exchange Management Act, 1999

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Here is the Next post of MCQ on concept based practical professional knowledge on The Residential Status as per Foreign Exchange Management Act, 1999 in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants

MCQ 84.1: Printex Computer is a Singapore based Company having several business units all over the world. It has a unit for manufacturing Computer Printers with its headquarters in Pune. It has a branch in Dubai which is controlled by Head Quarters in Pune. What would be the Residential Status under FEMA 1999 of Printer Units in Pune and that of Dubai Branch?

A. Both are Person Resident in India.

B. Both are Person Resident Outside India

C. Pune Branch is Person Resident in India and Dubai Branch is Person Resident Outside India

D. Dubai Branch is person Resident in India and Pune Branch is Branch is Person Resident Outside India.

MCQ 84.2: Would your answer be same if Printex Computer has Manufacturing Units with headquarters in Dubai and branch in Pune?

A. Both are Person Resident in India.

B. Both are Person Resident Outside India

C. Pune Branch is Person Resident in India and Dubai Branch is Person Resident Outside India.

D. Dubai Branch is person Resident in India and Pune Branch is Branch is Person Resident Outside India

Answer MCQ Self Challenge #0084

This post of MCQ is on provisions relating to Foreign Exchange Management Act 1999

Answer MCQ 84.1:

A) Both are Person Resident in India

Answer MCQ 84.2:

B) Pune Branch is Person Resident in India and Dubai Branch is Person Resident Outside India

Practical Analysis of MCQ 84.1 & 84.2

• As per the Foreign Exchange Management Act Section 2(u) defines person as
• A Company
• Any agency, office or Branch owned by person
  
• Section 2(V) defines Person Resident in India
• An office. Branch or Agency in India owned or controlled by a person Resident Outside India
• An office, Branch or Agency outside India owned or controlled by a person Resident in India

• In the Given case, Printex Computers (Singapore), its headquarters in Pune and Dubai Branch are falling under definition of person So their Residential Status under FEMA 1999 shall be determined separately.
• The Pune Headquarters of Printex Computers falls under the First leg of definition Person Resident in India" i.e. office, Branch or Agency in India owned or controlled by a person Resident Outside India (Controlled by Printex Computers Singapore)
• The Dubai branch of Printex Computers (Singapore), though not owned is controlled by the Pune Headquarters, thus falling in the Second Leg of Definition Person Resident in India Le office. Branch or Agency outside India owned and controlled by a person Resident in India.
  
  
• In the Second Question the Stuation is Reversed Le Headquarters is Dubai and Branch is in Pune
• The Dubal Headquarters of Printex Computers does not falls under any LEG of definition "Person Resident in India i.e. its office, Branch or Agency is neither in India nor owned or controlled by a person Resident in India Controlled by Printex Computers Singapore). Thus Dubai headquarters is a Person Resident outside India.
• The Pune branch of Printex Computers (Singapore), though controlled by the Dubai Headquarters fans in Definition Person Resident in India" i.e. office Branch or Agency in India owned or controlled by a person Outside India (Dubai Branch)

Based on the above analysis. Correct answer to MCQ 84.1: A) Both are Person Resident in India and Correct answer to MCQ 84.2: 8) Pune Branch is Person Resident in India and Dubai Branch is Person Resident Outside India.

(Disclaimer: The objective of the McQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion: you can definitely have your own opinion.)

Sincere Regards

CA Sanjay Kumar Agrawal

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