The establishment of a liaison office in India is generally permitted under automatic route of approval and the application is filed in Form FNC to the Authorised Dealer Category -1 appointed by the RBI. Mostly scheduled banks has been appointed as AD for setting up of the liaison office in India.
The liaison office of a foreign corporation can do limited activities in India and to be precise only four kind of activities are permitted. Following is the list of activities which have been allowed for a Liaison Office in India, as prescribed under regulation 4(b) of the Notification number FEMA 22 (R)/2016-RB dated March 31, 2016.
- To represent the parent or group companies in India
- To engage in activities which are in the nature or promotion of Import or Export
- To promote technical or financial collaborations between parent/group company or companies in India.
- To act as a channel of communication between the parent company and the Indian Company.