What are the rules for remittance to non residence directors

1. The Reserve Bank has granted general permission to companies in India making payments in Indian rupees to their non-resident (including foreign nationals non-whole time directors while on a visit to India for the company’s work such as attending Board meeting etc., towards sitting fees, commission or remuneration by way of monthly or quarterly or annual payment in accordance with the provisions contained in the Company’s Memorandum and Articles of Association or in any agreement entered into by it or in any resolution  passed by the company in General Meeting or by its Board of Directors. This general permission is, however, subject to the condition that the company has obtained the necessary approval from the Central Government wherever it applies.
   
   
2. Applications for remittances of savings, if any, out of sitting fees paid to the non-resident directors by the Indian companies concerned for actual attendance in Board meeting should be made to authorized dealers on  form A2 together with a certificate issued by the company concerned confirming payment of sitting fees. Authorized dealers may allow such remittance on verification of the company’s certificate regarding payment of the sitting fees.
   
   
3. Applications for remittance on account of payment of commission, remuneration etc., to the non-resident directors should be made by Indian companies concerned to authorized dealers on form A2 together with a certified copy of audited balance sheet of the company and a worksheet duly certified by a Chartered Accountant indicating how the remittable amount has been arrived at. Applicant’s undertaking/Accountant’s certificate regarding payment of income tax in the prescribed form should also be submitted. Authorized dealers may allow remittance of net commission/remuneration after satisfying about the correctness of the amount and verification of the terms of appointment of the director.