As announced in the Statement on Developmental and Regulatory Policies dated October 01, 2025, the Reserve Bank had issued 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, vide Notification No. FEMA 22(R)/2016-RB. dated March 31, 2016.

2. On a review, it has been decided to amend the extant regulations along the following lines:

1. The eligibility criteria for establishment of a place of business in India, are proposed to be relaxed.

2. The draft proposals offer greater operational freedom by shifting from prescriptive to a principle-based framework, which is expected to result in greater operational freedom.

3. The process for closure of non-compliant and inactive branch/office, are proposed to be simplified.

3. Comments/feedback on the draft regulations may be submitted through the ‘Connect 2 Regulate’ Section available on the RBI’s website or via email by October 24, 2025, with the subject line “Feedback on draft regulations on Branch or office”.

(Brij Raj)          
Chief General Manager

Foreign exchange management draft regulations propose relaxed eligibility and a principle-based framework for business establishments in India. The Reserve Bank's draft 2025 regulations replace the 2016 regime by relaxing eligibility criteria for establishing branches, liaison, project or other places of business in India, and by moving to a principle-based framework to provide greater operational freedom. The draft further simplifies the closure process for non-compliant and inactive branches or offices and invites stakeholder comments via the 'Connect 2 Regulate' portal or email by October 24, 2025.