AD Code Registration

Overview

An AD Code is provided by Authorized Dealer Banks, which are banks that have been approved by the RBI to deal in foreign exchange. These banks act as intermediaries between the Reserve Bank of India and entities involved in international trade.

Who Needs AD Code Registration?

1.     Importers: Any business that imports goods or services into India must obtain an AD Code from the authorized dealer bank.

2.     Exporters: Businesses engaged in the export of goods or services need an AD Code for receiving payments from abroad.

3.     Foreign Direct Investment (FDI): Companies receiving foreign investment must have an AD Code for remittances and other related transactions.

4.     Non-resident Indian (NRI) Remittances: If you are receiving funds from an NRI or sending money abroad for any business transactions, an AD Code is required.

Why is AD Code Required ?

1.     Regulation of Foreign Exchange Transactions: The AD Code helps regulate foreign exchange transactions in compliance with Foreign Exchange Management Act (FEMA).

2.     Customs and Bank Compliance: It ensures that foreign transactions comply with the requirements of customs and tax laws and prevents money laundering.

3.     Simplifies Trade: It allows businesses to efficiently handle payments and receipts for international trade and foreign remittances.

4.     Facilitates Government Schemes: Many export promotion schemes require an AD Code to benefit from incentives and tax exemptions.

Documents Required for AD Code Registration

1.     PAN Card: A copy of the Permanent Account Number (PAN) of the business.

2.     Business Proof: Copy of the Certificate of Incorporation for companies or Partnership Deed for partnerships.

3.     Bank Account Details:

o    Bank statement of the applicant's business account.

o    A cancelled cheque from the business’s bank account.

4.     Import/Export Documentation (if applicable):

o    Import-Export Code (IEC) for businesses involved in import/export activities.

5.     GST Registration: GST number (if applicable).

6.     Address Proof: Proof of the applicant’s business address (such as a utility bill, lease/rent agreement, or property tax receipt).

7.     Authorized Signatory Details: The details of the authorized signatory, including their Aadhaar card or Passport.

Tuticorin

AD Code Registration Process

 1.     Consult with our experts

          2.     Submit your documents

3.     Processing of Application

4.     Issuance of AD Code

AD Code Renewal and Updates

• The AD Code does not have an expiry date and is typically valid for a lifetime unless there are significant changes in business activities.
• Updating the AD Code: If there are any changes in the business, such as a change in the authorized signatory, business address, or bank account, the AD Code should be updated with the bank.
• Re-application: If the business is changing banks, the new bank may require you to apply for a fresh AD Code.

Benefits of AD Code

1.     Regulation of Foreign Transactions: Ensures that businesses comply with the foreign exchange regulations under FEMA.

2.     Customs and Tax Compliance: Simplifies customs clearance and tax filing for international trade transactions.

3.     Payment and Receipt of Foreign Funds: Facilitates smooth receipt of funds from international clients and payment to foreign suppliers.

4.     Government Export Schemes: Required to avail benefits under government schemes, such as Export Promotion Capital Goods (EPCG), Duty Drawback, and others.

Conclusion

The AD Code is an essential requirement for businesses engaged in foreign trade or transactions involving international remittances. It ensures compliance with foreign exchange regulations and simplifies the process of receiving payments from abroad or making payments to foreign suppliers. Obtaining the AD Code from an Authorized Dealer Bank is a straightforward process, and it opens doors to facilitating global trade and access to government schemes.