Check Eligibility for Liaison Office Registration in India - Preparatory Stage - 1
The establishment of place of business in India for a foreign company/corporation is governed by the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016. For the purpose of setting up a liaison office following is the most important qualifications.
- No income generating activity is permitted
- The networth of foreign head office must be above $ 50,000
- The applicant company should have profitability track record of three years.
Only four kinds of activities are permitted for the liaison office, please refer - Permittd Activities for Liaison Office for details
Drafting of Government Forms and Documents - Preparatory Stage - 3
After we receive the complete set of basic documents we shall draft following documents for signature by the applicant company and the authorised signatory
- Board Resolution approving the opening of the liaison office in India
- Declaration from the applicant on FDI eligibility and source of fund
- Declaration about the nature of the activity, the location of the activity of proposed LO and nature of the activity, the location of activity of the applicant company.
- Form FNC
- Letter of Comfort form holding company
Legalisation of Documents - Preparatory Stage - 4
All documents which are originating from a foreign country or which is signed/executed in a foreign country shall be legalized either through Indian Embassy or to be apostilled as per the Hague Convention.
Net Worth Requirement
The foreign parent company must have a profitable track record of three years in a row & the net worth must be more than $ 50,000 attested by their auditors.
No Income Generating Activity
The liaison office can not earn any income in India, and the parent company must finance all its operations. An undertaking from the parent company is required.
Name & New Office
The name must be same as that of the foreign parent company, and for each new office of such liaison office, a new approval is required from RBI with justification.
Taxation in Indian
The income tax on a Liaison Office can be imposed by Indian tax authorities when it is established that the transaction amounts to commercial operation through PE.