Dear Sir,
I would request you if you can provide information about the provisions of FCRA and other laws related to a person who is a foreign citizen of Indian origin with an OCI card retired and moved to India to start an NGO from his personal savings working abroad:
1. Will the money he contributes to start and run his NGO be in violation of FCRA act.
2. Can that person be on the board of the directors and member or trustee?
3. Can such person receive donation from his friends and family who are OCI holder settled abroad?
4. Can such NGO get special permission to receive foreign funds? Can his NGO receive donations in Indian currency from visiting foreign national volunteers not Indian origin volunteers?
5. Can he use his NRO or NRE bank account in India to fund his NGO?
6. Does it make in all above cases if the person acquired the Aadhar Card (by law an OCI holder can get Aadhar after stay in India for 182 days in the last one year).
Can you please help me answer the questions that my NRI friend had inquired?
Thanks Aman T
Dear Aman,
Please note the following:
1. Since he is a foreigner his funds donated towards the charity set up by him in India will attract the provisions of the FCRA.
2. A foreigner is not entitled to be on the board of Charitable institutions in India which is likely to get registered under FCRA. There are 5 exceptional cases under which a foreigner can be on the Board of the institution that too with the prior approval of the MoHA.
3. Yes. Will attract the provisions of the FCRA. Only the funds received from NRI (since that have an Indian passport) will not attract the provisions of FCRA even if donated in foreign currency
4. There is no special provision to receive foreign funds except as prior permission. This licence is restricted to a certain amount and period, whichever lapses earlier. NGO can receive donation from foreign nationals in INR but the amount will attract the provisions of FCRA as the contributors are not Indian citizens holding valid Indian passport.
5. Will attract the provisions of FCRA.
Thanks and regards,
B V Soma Sastry
Thx for your reply and clarification on the issue.
Regarding the response from B.V. Soma Sastri to question number 2, can you please clarify what are the 5 exceptional cases to be on board indicated the reply as under:
2. A foreigner is not entitled to be on the board of Charitable institutions in India which is likely to get registered under FCRA. There are 5 exceptional cases under which a foreigner can be on the Board of the institution that too with the prior approval of the MoHA.
Dear Aman,
Siva has given you all the answers in a very precise manner. I would just like to supplement his comments to give you an indication of the logic behind these answers. Please note, OCI card does not grant citizenship, it just helps a foreign citizen of Indian origin not to worry about visa when coming to India, plus certain other investment opportunities. Since all foreign citizens are treated as ‘foreign source’ under FCRA (unless Govt changes this law), hence OCI card is not very helpful, except for getting on Board of Non-profits. Hence even another OCI card holder has the same status, i.e., a foreign source, hence money rec’d from your friends may not be helpful.
There are two schools of thought, relating to a foreign citizen who earns in India, whether that money can be given as donation to an NGO. Persons who strictly interpret FCRA generally state that since the owner of such funds is a foreign source, even if its Indian money, it should be treated as Foreign Source. While there is another school of though which states that since the money has been earned in India and possibly deposited in an NRO account, it may be allowed to be treated as Local money and may be accepted. However I would err on the side of caution, and suggest not to take such risks, considering whimsical working of the FCRA Dept.
As Siva also mentioned Adhar Card does not prove your citizenship, it is a proof of your address in India, and hence is needed only for disclosure while applying for FCRA permission, but does not impact your status of being ‘Foreign Source’.
Hope this will be of help.
The case shows that the person is till a foreign national holding OCI and Aadhar cards. So the answers to his questions will be:-
1. He cannot use his money to start an NGO without obtaining FCRA registration.
2. He can be on the board, but that fact should be mentioned in the FCRA application. In such case, getting FCRA will attract more time.
3. He can receive after getting FCRA registration.
4. If he has to apply for prior permission, the source of funding should be one entity. His NGO can receive funds from foreign national volunteers in Indian currency, but that should be after getting FCRA registration and the money thus received should be deposited or credited in to the earmarked FC account.
5. The money in his NRO or NRE account could be used for funding his NGO, again after getting FCRA registration only. If it is NRI account of some donor, then it could go the local fund account of the NGO.
6. Aadhar details of Board members are required for applying for FCRA registration, but getting an Aadhar card for himself does not mean that he can run the NGO without getting FCRA registration