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Microlesson · 5-min read

Section 2(u) - Definition of Person

# Section 2(u): Person under FEMA

The term 'Person' is defined inclusively and is wider than the income tax definition because it specifically includes branches, offices and agencies.

## Categories of Person

1. Individual

2. HUF (Hindu Undivided Family)

3. Company

4. AOP / BOI (Association of Persons / Body of Individuals)

5. Artificial juridical person not falling in above categories

6. Any agency, office or branch owned or controlled by such person (i.e., by any of the above)

## Why Branches Are Treated as 'Persons'

For FEMA purposes, a branch is treated as a SEPARATE person from its parent. This matters because:

  • A Mumbai branch of an American company is a person on Indian soil.
  • A Dubai branch of an Indian company is a person on foreign soil.
  • Each can have its own residential status independent of the parent's location.

This is crucial when applying the residential status test (Section 2(v)).

## Quick Reference Table

Type of PersonExample
IndividualMr. A
HUFSharma HUF
CompanyTata Motors Ltd.
AOP/BOIJoint venture group
Artificial juridical personDeity, university
BranchMumbai branch of Tesla US
AgencyIndian agent of a foreign principal
OfficeLiaison office of a foreign company in India

Worked example

### Example 1

Example 1: Tesla USA (PROI) opens a branch in Mumbai. The Mumbai branch is a separate 'person' for FEMA — and being situated in India, it is a PRI.

### Example 2

Example 2: Tata Motors (PRI) opens an office in London. The London office is a separate 'person' for FEMA — and depending on its activity may be PROI.

⚠️ Common exam mistakes

  • Treating a branch as a mere extension of the parent — for FEMA each branch is a SEPARATE person.
  • Forgetting that agencies and offices are covered.
  • Confusing this with the income tax definition where branches are not separate persons.
Bare-Act text Section 2(u) · Foreign Exchange Management Act, 1999 · click to expand
"Person" includes— (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and (vii) any agency, office or branch owned or controlled by such person.
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