Liaison Office Registration in India
A Liaison Office functions purely as a representative office, making it an ideal first step for foreign companies looking to explore business and investment opportunities in India. It plays a key role in establishing communication between the Indian market and the foreign Head Office, helping bridge the gap for future business expansion.
The activities of a Liaison Office are limited to:
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Gathering insights into potential market opportunities
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Sharing information about the parent company and its offerings
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Facilitating communication about sources of supply to Indian consumers, or vice versa, to vendors abroad
At Value Recruiters, we specialize in helping foreign companies seamlessly set up Liaison Offices in India. From handling compliance and documentation to guiding you through RBI and regulatory processes, our team ensures a smooth and strategic entry into the Indian market.
FAQs
What is the procedure to set up a Liaison Office in India?
If a foreign company is looking to establish a Liaison Office in India, the first step is to get prior approval from the Reserve Bank of India (RBI). The approval process typically takes about 3 to 4 weeks.
Once approved, the Liaison Office can operate in India for a period of 3 years, after which the approval can be renewed if needed.
To apply, the foreign entity must fill out Form FNC and submit it along with the following supporting documents:
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A Certificate of Incorporation/Registration of the parent company
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A copy of the company’s Memorandum and Articles of Association (MOA & AOA), attested by either an Indian Notary Public or the Indian Embassy in the country of incorporation
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The company’s latest audited balance sheet
At Value Recruiters, we assist foreign companies at every step—from preparing documents and filing Form FNC to coordinating with authorized banks and ensuring compliance with RBI guidelines. Our goal is to make the process smooth, stress-free, and successful for your business entry into India.
What Activities Can a Liaison Office Undertake in India?
A Liaison Office serves as a non-commercial extension of its foreign parent company and is allowed to perform only a limited set of activities, such as:
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🤝 Representing the parent company in India
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💡 Facilitating technical or financial collaborations between the parent company and Indian businesses
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🌐 Promoting import and export of goods and services between India and the home country
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📞 Acting as a communication bridge between the foreign parent company and Indian counterparts
At Value Recruiters, we help ensure your Liaison Office is set up correctly to perform these permitted functions while staying fully compliant with Indian regulations.
RBI’s Eligibility Criteria for Setting Up a Liaison Office in India
To open a Liaison Office in India, the Reserve Bank of India (RBI) has laid down specific eligibility requirements for foreign companies. Here’s what you need to know:
✅ Basic Eligibility:
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The parent company must have a profitable track record for the last 3 financial years.
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The foreign company’s net worth (including paid-up capital and free reserves) must be at least USD 50,000.
✅ Regulatory Compliance:
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Every approved Liaison Office must register with the Ministry of Corporate Affairs (MCA).
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Upon registration, a Corporate Identity Number (CIN) is issued, officially establishing the foreign company’s presence in India.
🔁 What If Criteria Aren’t Met?
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If the applicant company doesn’t meet the above criteria but is a subsidiary of a company that does, it can submit a Letter of Comfort from its parent company.
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In such cases, the Authorised Dealer (AD) bank will verify the details and forward the application to RBI with their comments.
Once the RBI approves the application:
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The company receives a Unique Identification Number (UIN).
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It must then apply for a PAN (Permanent Account Number) from the Income Tax Department to officially start operations.
Key Features of a Liaison Office in India
Setting up a Liaison Office is an excellent first step for foreign companies exploring business opportunities in India. Here’s what makes it unique:
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Same Name as Parent Company
The Liaison Office must operate under the exact name of the foreign parent company—no modifications allowed. -
Governed by RBI or AD Bank
Operations and approvals are regulated by the Reserve Bank of India (RBI) or an Authorised Dealer (AD) Bank. -
Not a Separate Entity
A Liaison Office is not an independent business—it functions as an extension of the parent company, without any ownership rights in India. -
Ideal for Temporary Market Presence
Perfect for companies seeking to explore the Indian market or maintain business communication with local clients—without full-fledged operations. -
Expenses Covered by Parent Company
All operating costs must be funded directly from the parent company abroad, via inward remittances to an Indian bank account. -
No Tax Liability in India
Since Liaison Offices don’t generate income in India and can’t engage in commercial activity, they are not liable to pay taxes under Indian income tax laws.
Services for Foreign Companies
Business setup in India
Global economic growth is steadily pivoting towards developing nations, and India stands out as a powerhouse of opportunity. As one of the fastest-growing economies, India presents immense potential for businesses aiming to expand their global footprint. Establishing a physical presence in the country is crucial to unlocking its vast market potential. However, choosing the right form of entry—whether a Branch Office, Liaison Office, or Project Office—can significantly impact your success. The correct setup isn’t just a formality; it’s a strategic decision that can make or break your business expansion journey in India.
Liaison Office
A foreign company can seamlessly establish its presence in India by setting up a Branch Office. This setup enables the parent company to carry out specific business activities while staying connected to its global operations. To initiate this, the foreign entity must secure approval from the Reserve Bank of India (RBI) and complete the registration process with the Registrar of Companies (RoC). As per the provisions of the FEMA Act, 1999, any corporate body incorporated outside India is required to obtain RBI’s permission before opening a Branch Office in the country. This ensures regulatory compliance and smooth operation in India’s dynamic business environment.
Branch Office
Foreign companies seeking a limited yet effective presence in India often choose to establish a Project Office. This is the most suitable route for businesses aiming to execute a specific project within a defined timeframe. Setting up a Project Office allows foreign entities to operate in India without incorporating a full-fledged subsidiary. However, such companies must obtain prior approval from the Reserve Bank of India (RBI) and register with the Registrar of Companies (RoC), provided they hold a valid contract to carry out a project within the country. This approach ensures regulatory compliance while enabling streamlined project execution.
Transfer Pricing
Transfer pricing involves evaluating the nature, treatment, and tax impact of transactions between related entities operating across different countries. These intra-group transactions are assessed to determine if they conform to the arm’s length principle—ensuring the prices charged reflect those that would be applied between unrelated parties under similar circumstances. Using recognized methodologies, tax authorities can verify whether profits are fairly allocated across jurisdictions. This promotes transparency, reduces the risk of tax avoidance, and ensures compliance with both domestic laws and international tax standards.
FEMA Advisiory
If you’re looking for a dependable partner or a trusted FEMA advisor, your search ends here. With a dedicated team of highly experienced FEMA consultants, we provide comprehensive support covering FEMA compliance, bookkeeping, accounting, GST return filing, and more. We aim to streamline your financial functions while keeping you fully compliant with regulatory frameworks. With our in-depth knowledge and client-focused approach, we help businesses stay organized, compliant, and equipped for long-term growth in a dynamic financial environment.
Taxation of Expatriates
As industry frontrunners, we specialize in delivering robust accounting and reporting services that adapt to today’s fast-paced business environment. From cloud-based platforms to real-time bookkeeping and automated GST processes, our solutions are designed to enhance accuracy, speed, and compliance. We help you navigate through digital transformation, regulatory challenges, and operational demands—ensuring you remain competitive and future-ready. Whether you’re a startup or an established enterprise, we bring reliability, innovation, and excellence to every financial solution we offer.