**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on November 23, 2020 (A.P. DIR Series Circular No. 07, RBI/2020-21/69), addresses the establishment of Branch Offices (BO), Liaison Offices (LO), Project Offices (PO), or any other place of business in India by foreign law firms. It supersedes earlier guidance (AP DIR Series Circular No. 23 dated October 29, 2015) following a Supreme Court ruling.
The circular clarifies that foreign law firms, companies, or lawyers, and any other person resident outside India, are prohibited from establishing any form of business presence in India for the purpose of practicing law. The Supreme Court has held that only advocates enrolled under the Advocates Act, 1961 are entitled to practice law in India.
Authorized Dealer (AD) Category I banks are instructed not to approve any applications for BOs, LOs, POs, or other places of business under the Foreign Exchange Management Act (FEMA) if the purpose is to practice legal profession in India. Banks are also directed to report any violations of the Advocates Act to the RBI.
All other provisions of the existing policy regarding BO/LO/PO remain unchanged. The Master Direction No. 10 dated January 1, 2016, is being updated to reflect these changes.
The directions are issued under Section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals required under any other law.
For further information, AD Category I banks may contact Ravinder Singh Amar, Chief General Manager, Reserve Bank of India.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector and managing the country's monetary policy.
All Category I Authorized Dealer Banks: Entities authorized by the Reserve Bank of India to deal in foreign exchange.
Branch Office: A physical location of a foreign law firm in India.
Liaison Office: A representative office of a foreign law firm in India, primarily for communication and coordination.
Project Office: A temporary office set up for a specific project undertaken by a foreign entity in India.
Supreme Court: The highest judicial body in India.
Advocates Act, 1961: An act of the Parliament of India to regulate the legal profession in India.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/69
A.P. (DIR Series) Circular No. 07 November 23, 2020
To,
All Category - I Authorized Dealer Banks
Madam / Sir
Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO)
or any other place of business in India by foreign law firms
Attention of the Authorised Dealer (AD - Category I) banks is invited to AP (DIR Series)
Circular No. 23 dated October 29, 2015, on the above issue advising that no fresh
permissions/ renewal of permission shall be granted by the Reserve Bank/AD
Category-I banks to any foreign law firm for opening of Liaison Office in India, till the
policy is reviewed based on, among others, final disposal of the matter by the Hon’ble
Supreme Court.
2. The Hon’ble Supreme Court has while disposing of the case, held that advocates
enrolled under the Advocates Act, 1961 alone are entitled to practice law in India and
that foreign law firms/companies or foreign lawyers cannot practice profession of law
in India. As such, foreign law firms/companies or foreign lawyers or any other person
resident outside India, are not permitted to establish any branch office, project office,
liaison office or other place of business in India for the purpose of practicing legal
profession. Accordingly, AD Category – I banks are directed not to grant any approval
to any branch office, project office, liaison office or other place of business in India
under FEMA for the purpose of practicing legal profession in India. Further, they shall
bring to the notice of the Reserve Bank in case any such violation of the provisions of
the Advocates Act comes to their notice.
3. All other provisions of the BO/LO/PO policy shall remain unchanged. AD Category
- I banks may bring the contents of this circular to the notice of their constituents and
customers.4. The Master Direction No. 10 dated January 1, 2016 is being updated simultaneously
to reflect the changes.
5. The directions contained in this circular have been issued under Section 10(4) and
11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(Ravinder Singh Amar)
Chief General Manager