(i) Indian firms/companies may engage the services of foreign nationals (including non-resident persons of Indian nationality/origin) on short-term assignments without prior approval of Reserve Bank. Applications for remittance of remuneration to foreign nationals or foreign companies (in the case of company-to-company contracts) should be made by the Indian firms/companies to authorised dealers on form A2 together with a statement in form EFT (in duplicate) and an Undertaking/ Certificate regarding payment of Income-tax (cf paragraph 3 B.10) Before allowing the remittance, authorised dealers should verify the statement in form EFT and the other documents/information submitted and be satisfied that - (a) the amount of remittance sought for is in accordance with the terms of contract entered into by the applicant firm/company with the foreign national/company.
(b) the services of the foreign national are not covered either by any foreign collaboration agreement entered into by the Indian firm/company or under any warranty/guarantee obtained providing for deputation of the foreign national without any remuneration or any payment during the warranty/guarantee period. A confirmation to this effect should be obtained from the company concerned.
(ii) If the period of engagement of the foreign national is upto 3 months, authorised dealers should ensure that the concerned foreign national holds a valid visa i.e. employment, business, tourist etc. If the period exceeds three months, authorised dealers should ensure that the concerned foreign national holds a valid employment visa.
(iii)A copy of the form EFT should be forwarded to Reserve Bank along with form A2 at the time of reporting the remittance in R Returns.
(iv) All payments made in connection with engagement/ deputation of foreign personnel including payments made locally in Indian rupees towards their passage fares, local living expenses, etc. are liable for the levy of Cess under the Research and Development Cess Act, 1986. Authorised dealers should advise their constituents to deposit the amount of Cess while allowing the remittance towards fees of foreign personnel.