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.