Can an Indian Company Hold a USD Bank Account
TL;DR - Summary
- Can an Indian company hold a USD bank account legally? - Yes. A resident Indian company earning foreign exchange can open an EEFC account with an AD bank in India, subject to RBI rules.
- What is an EEFC account and what RBI rules govern it? - It holds eligible foreign earnings without immediate INR conversion. Each month’s unused receipts must be converted by the end of the following month, after approved uses and forward commitments.
- What is a virtual USD account and how is it different from an EEFC account? - A virtual account provides receiving details for INR settlement. An EEFC account holds eligible foreign currency earnings at a bank, subject to RBI rules.
- How can an Indian company start receiving USD payments? - Open an EEFC account with an AD bank, or sign up online for free virtual receiving details on Skydo. Account activation depends on verification.
Can an Indian Company Legally Open a USD Bank Account?
Yes, an Indian company can hold US dollars (USD) in an Exchange Earners’ Foreign Currency (EEFC) account in India. The Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) rules allow resident foreign exchange earners to open one with an authorized dealer bank. Exporters can also open foreign currency accounts with banks overseas, subject to separate use and repatriation rules.
An EEFC account lets you credit up to 100% of eligible foreign currency earnings without immediately converting them into Indian rupees (INR). You can use the balance for permitted foreign currency payments before the conversion deadline. Special Economic Zone (SEZ) units use a separate foreign currency account facility, rather than EEFC accounts.
Say a Pune-based software exporter invoices a US client $5,000. It can park that amount in an EEFC account briefly, which helps if it needs to pay a foreign vendor in USD soon after.
If you simply want to receive USD from a foreign client and settle in INR, a virtual receiving account may be a simpler option. It converts funds at settlement rather than letting you hold USD.
Understanding RBI Guidelines for Corporate USD Accounts
Resident foreign exchange earners, including companies, limited liability partnerships (LLPs) and proprietors, can open EEFC accounts with authorized dealer (AD) banks in India. These are non-interest-bearing current accounts. Each calendar month’s receipts must be converted to INR by the last day of the following month, after adjusting for approved uses and forward commitments.
- Who can open one: Resident foreign exchange earners, including exporters of goods and services, can open EEFC accounts with AD banks. SEZ units have a separate foreign currency account facility.
- The conversion deadline: Convert each month’s unused receipts by the last day of the following calendar month, after adjusting for approved uses and forward commitments. This is not a rolling 30-day deadline for each receipt.
- A short-term facility: EEFC accounts are for managing foreign currency payments, not building a long-term USD savings balance. For example, unused receipts credited in October must be converted by November 30, subject to the permitted adjustments.
- What you can credit: Eligible foreign exchange earnings include export proceeds, export advances and other permitted receipts. Credits are not limited to exports, but foreign loans and investments are generally excluded from this account.
- No interest: EEFC accounts are current accounts, so they do not earn interest. Holding USD in them long-term offers no yield benefit.
- The legal framework: FEMA and RBI’s foreign currency account rules govern EEFC accounts. Ask your AD bank to confirm which receipts and payments qualify for your business.
- The right channel: Receive company export payments through an account or payment service approved for that business. Do not use a director’s personal account or a foreign contact’s account as a shortcut; any third-party payment arrangement must meet the applicable rules and your AD bank’s checks.
⚠️ COMMON MISCONCEPTION
An EEFC account is not a USD savings account. Each month’s unused receipts must be converted by the end of the following month, after approved uses and forward commitments.
How to Open a USD Bank Account for an Indian Company
To open an EEFC account, approach an AD Category I bank that offers the facility. HDFC Bank, ICICI Bank and Axis Bank are examples. The bank will check your business identity and the source of your foreign currency earnings; eligibility is not limited to exporters.
Ask the bank which branch or trade team handles EEFC accounts. It may route your application through a specialist forex branch.
Typical documents required are:
- Certificate of Incorporation or business registration proof
- Permanent Account Number (PAN) of the company
- Goods and Services Tax (GST) registration certificate, if applicable
- Export documents and Importer Exporter Code (IEC), where applicable; confirm the bank’s checklist
- Know your customer (KYC) documents of authorized signatories and the company’s account-opening authorization
The process runs in this order:
- Contact an AD Category I bank that offers EEFC accounts and confirm its application process.
- Submit the documentation.
- The bank verifies your documents. Ask it for the expected opening time; this varies by bank and application.
- Once the account is open, export receipts in USD are credited to it.
- Use funds for permitted payments or convert unused receipts by the end of the following calendar month, after adjusting for forward commitments.
Keep the bank’s remittance advice, invoices and payment records. A Foreign Inward Remittance Advice (FIRA) is not automatically the same as a Foreign Inward Remittance Certificate (FIRC). For service-export GST refunds, the rules call for the relevant Bank Realisation Certificate (BRC) or FIRC. Goods-export refunds and export incentives have their own evidence requirements, so confirm the documents needed for your claim.
✅ PRO TIP
Goods exporters should check their bank account and AD code registration with customs for the relevant export location. This is a customs requirement, not a universal prerequisite for opening an EEFC account.
Why Your Indian Business Needs a US Dollar Account?
An EEFC account can help if you invoice foreign clients in USD and also have permitted USD expenses. You can use eligible receipts for those payments without converting to INR and back, or choose when to convert within RBI’s deadline. A virtual receiving account serves a different need: collecting the payment and settling it in INR.
- Control over conversion timing: An EEFC account lets you choose when to convert within the permitted window. If you receive directly into an INR account, conversion follows your bank’s process and agreed rate, which may include a spread or markup.
- Less double conversion: If you need to pay a foreign software-as-a-service (SaaS) vendor, contractor or supplier, using eligible USD receipts directly can avoid converting USD to INR and then buying USD again. The payment must be permitted under the foreign exchange rules.
- Short-term rate flexibility: You can choose your conversion date before the deadline, but exchange rates can move either way. Waiting does not guarantee a better rate.
- Simpler reconciliation: Dedicated USD receiving details can help match client payments to invoices. You do not need to hold a USD balance simply to quote or invoice a client in USD.
An Indian information technology (IT) services firm receiving USD from US clients, for example, can credit eligible earnings into an EEFC account instead of converting them on receipt.
Top Multi-Currency Business Accounts for Indian Exporters
Two common options are an EEFC account at a bank and virtual receiving details from an authorized cross-border payment platform. Use an EEFC account if you need to hold eligible foreign currency briefly or pay permitted foreign expenses. Choose a virtual receiving account if you want to collect overseas payments and settle in INR.
- How it works: Virtual USD receiving details include an account number and routing information for supported transfers. Clients pay into those details, and the platform converts and settles the funds into your Indian bank account.
- Multi-currency receiving: Supported currencies and payment routes vary by provider. Skydo offers receiving details for USD, EUR, GBP, SGD, AUD and CAD, among other supported options. Use the account matching your client’s country and payment currency.
- Setup time: Payment platforms offer online sign-up, but activation depends on verification. Skydo’s sign-up takes about five minutes with documents ready; manual document checks can take longer. Bank EEFC opening times vary.
- Payment evidence: Documentation depends on the provider and payment route. Skydo automatically provides a free FIRA for each settled international payment. Check whether your bank, tax filing or incentive claim needs other supporting records.
- Fees: Bank charges can include a conversion spread, Society for Worldwide Interbank Financial Telecommunication (SWIFT) fees and correspondent bank charges. Platform fees vary too; compare the transaction fee, GST, conversion rate and any sender-bank or route charges.
The table below sets an EEFC account against a virtual USD account via a payment platform.
| Feature | EEFC Account (Bank) | Virtual USD Account (e.g. Skydo) |
|---|---|---|
| Setup time | Varies by bank and verification | Online sign-up; activation after verification |
| Conversion rule | Convert unused monthly receipts by end of next month, after permitted adjustments | Converts at settlement, live rate |
| Flat fee | Bank-specific fees and FX spread may apply | Tiered fees plus GST; see pricing below |
| FIRC/FIRA | Issued by bank, may need follow-up | Free FIRA after settlement |
| Who it suits best | Businesses with eligible foreign earnings and foreign currency expenses | Small businesses, freelancers, exporters wanting speed |
| Currencies supported | USD and other supported currencies | USD, EUR, GBP, SGD, AUD, CAD |
| Monthly fee | Varies by bank | No Skydo setup or maintenance fee |
Receive international payments with free virtual USD receiving details and automatic FIRA on Skydo. Sign up online in about five minutes with your documents ready; activation is subject to verification.
How Does Skydo Help Indian Companies Receive USD Payments?
If you want to receive USD and settle in INR rather than hold foreign currency, Skydo offers free virtual receiving details in USD, EUR, GBP, SGD, AUD and CAD. Sign up online in about five minutes with documents ready. You can start receiving payments after verification is complete.
- Pricing: For Global Bank Account payments, the fee is $19 up to $2,000, $29 from $2,001 to $10,000, and 0.3% above $10,000, plus 18% GST on the fee. Conversion uses a live rate with zero forex markup. There are no setup or maintenance fees. Amazon Global Selling and payment-link pricing differ; sender-bank or SWIFT-route charges may also apply.
- FIRA with each settled payment: Skydo automatically provides a free FIRA in your dashboard. Keep it with your invoice and fee records, and confirm any additional evidence needed for GST refunds or export incentives.
- Fully digital: Sign up, share documents and track payments online without a branch visit. If a payment needs more information or compliance checks, the team may ask for supporting documents.
- Predictable settlement: USD payments can settle in INR within one working day after collection and clearance. This is not an end-to-end guarantee: the client’s transfer, bank processing, holidays and compliance checks can add time.
- eBRC generation assistance: Link your Directorate General of Foreign Trade (DGFT) account, then use Skydo’s goods-export workflow to upload shipping bills and map inward remittance messages (IRMs) for an electronic Bank Realisation Certificate (eBRC). This helps prepare the evidence; your bank still handles export reporting closure.
- EDPMS closure assistance: Skydo can help with the records needed for the Export Data Processing and Monitoring System (EDPMS). Your AD bank closes or updates the entry; the platform does not replace that bank step.
- India-based support: Reach the team by phone, email or chat for help with payments and documents.
- Who it suits: Eligible goods and service exporters, documented freelancers and Amazon Global Selling exporters. Available payment routes, onboarding checks and pricing depend on the business and transaction.
How to Open a Virtual USD Account on Skydo
- Visit skydo.com and sign up with your business email.
- Complete KYC with your PAN, an owner’s Aadhaar verification, Indian bank details and business evidence. The documents depend on your business type; a GST certificate is not a universal sign-up requirement.
- Skydo verifies your details. Alternative business documents may need manual checks before you can receive payments.
- Receive your virtual USD account details (account number, routing details) and share them with your foreign client on your invoice.
- Your foreign client wires USD to your Skydo virtual account.
- Once the payment is collected and clears the required checks, Skydo converts it and settles INR into your linked Indian bank account. USD settlement can take one working day; the client’s transfer takes additional time.
- Download the free FIRA from your dashboard after the payment settles.
Can a private limited company in India open a USD account?
Yes. A resident private limited company with eligible foreign currency earnings can open an EEFC account with an AD bank in India, subject to the bank’s checks. For receiving USD and settling in INR, it can also apply online for virtual receiving details through an authorized provider such as Skydo.
What is the 30-day rule for EEFC accounts?
Is a virtual USD account the same as an EEFC account?
Can a freelancer in India use a USD account to receive payments?
What documents are needed to open an EEFC account?
Does Skydo issue FIRA for every transaction?
What currencies can an Indian company receive through Skydo?
Is it legal to receive USD payments in India through a virtual account?
