Reserve Bank of India (RBI) vide A.P. (DIR Series) Circular No.93 dated January 15, 2014 has modified the Regulation 4 of Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations,2000.The said Regulation 4 provides that no entity or person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China shall establish in India, a branch office or a liaison office or a project office or any other place of business by whatever name called, without the prior permission of the Reserve Bank.

RBI has now clarified that the provisions of the Regulation 4 shall extend to and applicable for the entities from Hong Kong and Macau as well. Meaning thereby the priorapprovalfromRBIshallberequiredforestablishment of Liaison/ Branch/ Project Offices or any other place of business by whatever name called by the entities registered in / resident of Hong Kong and Macau.