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Liaison Office Registration

By foreign company with RBI & ROC Registration

  1. RBI Approval within a Week
  2. Registration with the ROC
  3. Registration with State Police
  4. Allotment of PAN Card & GST
  5. Bank A/c Opening Support

A Foreign Company / Corporation can establish a representative or liaison office in India by obtaining permission from the Reserve Bank of India (RBI) and subsequently registering it with the ROC and State Police. We have good relationships to deliver smooth services in India.

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Liaison Office Registration in India

Liaison Office Registration in India

A Liaison Office (LO) functions as a place in India which represents a foreign company primarily to understand and explore the general business environment, market research for the products of the parent company and to provide and seek information from potential customers or vendors. A liaison office can be set up for representing in India the parent company/group companies, Promoting export/import from/to India, Promoting technical/financial collaborations between parent/group companies and companies in India and to Act as a communication channel between the parent company and Indian companies.

A liaison office of the foreign company can not engage in any commercial activities, and the parent company shall meet all the expenses of the liaison office. A liaison office is a foreign company and Indian government taxes the profits of such entities when it carries out the transactions which amount to commercial activities through a permanent establishment (PE) at higher rates. As of now the tax on the profit of the foreign company is 40% in contrast to the tax rate @ 30% on Indian company.

Branch Office of Foreign Registration

Important Points to Register Liaison or Representative Office

Net Worth Requirement

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

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

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

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.

Documents Required Attestation / Appostile

  1. FNC Form duly signed by AR
  2. Proof of Registered Office
  3. Note on Location / Proposed Activity
  4. NOC from the owner of the premises.
  1. Certificate of Incorporation & MOA
  2. Audited Financial of past 3 Years
  3. Board resolution to Open a Branch Office
  4. KYC of the Authorised Signatory
    1. FNC Form duly signed by AR
    2. Proof of Registered Office
    3. Note on Location / Proposed Activity
    4. NOC from the owner of the premises.

Liaison Office Registration Process

01

ATTESTATION OR LEGALISATION OF DOCUMENTS

All documents which are required to be filed with RBI of the foreign company like their certificate of incorporation, board resolutions, the moa and articles of the foreign company and the documents of the authorised signatory of the foreign company need to be legalised either through Indian Embassy or to be apostilled as per Hague convention.

02

FILING OF APPLICATION WITH RBI THROUGH AD BANK

The application for registration of a Liaison office of a foreign company is filed in FNC to the reserve bank of India through AD Bank (Authorised Dealer). The AD Bank plays a crucial role as all the communication to the RBI has to be routed through them. We have an excellent relationship with many banks in India, which certainly help in applying to the RBI and Follow Up.

03

VERIFICATION OF KYC FROM BANKER OF PARENT COMPANY

After FNC Form is filed with the AD Bank, a request for verification of documents is sent to the banker of the foreign company. This process is also known as swift based verification. After receipt of confirmation of the documents from the foreign banker, the application is submitted to the RBI for their approval. The RBI may seek clarification or any additional document which need to be submitted.

04

APPROVAL OF RBI FOR LIAISON OFFICE REGISTRATION IN INDIA

There is a specific policy of approving the establishment of a liaison office by the AD Banker itself and only cases where the automatic route is not available the cases are forwarded for prior approval of the RBI. The process of approval after swift verification is of a week.

05

REGISTRATION OF LIAISON OFFICE WITH THE ROC

After approval of the RBI for the establishment of the Liaison office in India, an application for registration of such liaison office or the representative office of the foreign company is filed in form FC-1 within 30 days to the ROC. In case there are Indian directors the DIN number of such director is needed, and the digital signature of the authorised signatory is required to e-file statutory forms with the ROC for their approval.

06

PAN CARD, TAX DEDUCTION NUMBER & BANK A/C OPENING

Income Tax Department allots a unique 10 Digit alphanumeric number as a permanent account number, also known as PAN Number. To comply with TDS provisions, every taxpayer needs to obtain a Tax Deduction Account Number. These identification numbers are essential to do compliance with the tax rules. The bank account of the branch office can be opened after allotment of Pan Number by the Income Tax Department.

07

REGISTRATION WITH STATE POLICE

Finally, the branch office needs to register it with the state police (In the office of the superintendent of Police). The application must be accompanied by the RBI approval and KYC of all authorised persons in India and the foreign company.

Liaison or Representative Office in India by Foreign Corporation

FAQ's

1.
What is a liaison office & Who can set-up a liaison office??

A foreign company before entering the Indian market may intend to conduct some preliminary research or representation before the potential customers or partners, for that limited purpose a foreign company normally establishes a representative office also known as a Liaison Office in India. Any person resident outside including a foreign company, group company, association of person can establish a liaison office in India.

2.
What is permitted/allowed activities for a branch office in India of a foreign entity?

A liaison office of a foreign company is allowed to do only limited activity in India, provided none of the activities is profit-making activity. In other words, a liaison office can do market research and representation activity only . Click to see the List of permitted activities for a Branch Office in India.

3.
What is Income Tax rate for a Liaison office of a Foreign Company?

A Liaison office of a foreign mother company is not treated as a separate and distinct entity in India and for all tax purposes, the Indian government taxes the profits of such entities at higher rates. As of now the Income Tax on the profit of a foreign company is 40% in contrast to the tax rate of 30% on an Indian company.

4.
What are the conditions /requirements for opening a Liaison office in India?

The liaison or representative office of a foreign company can be opened if the applicant foreign corporation has a track record of profit generation for the past 3 years and it is financially sound. When we say financially sound in the context of a representative or liaison office establishment in India of a foreign company, we mean net-worth of USD 50,000 or its equivalent. The financial statement duly attested by the statutory auditor of the parent company is required.

5.
What Documents are required for forming a Liaison Office in India?

Following documents are required for registration of a liaison office of the foreign company

  1. Certificate of Incorporation or business license of parent company
  2. Charter issued to the foreign company by the government
  3. Memorandum of Association or Articles (Rules of the Company)
  4. A declaration from the foreign corporation (parent company) that the parent company shall meet any shortfall in meeting the expenses of branch office
  5. Three years historical Financial Statement of the parent company duly attested by its auditors
  6. A certificate from the auditors of the parent company that the net worth of the parent co is more than $ 50,000 or its equivalent.
  7. The identity and address proof of the responsible person to do compliance for the branch office in India.
  8. Premises proof, where the branch office shall be registered
  9. A No objection certificate from the owner of the premises of registered office.
  10. In case the document is in the foreign language, then a certified translation thereof must be filed.
  11. All the document having foreign origin shall be legalised as per Hague convention or by the Indian embassy, high commission.

6.
What are Other Incorporation Requirements for Liaison Office Registration in India?

After approval of the RBI for establishing a Liaison office in India by a foreign company is obtained the same need to be registered with the ROC within 30 days by filing form FC-1 with the digital signature of the authorised person and following documents as annexure

  • A certified copy of the charter, statutes or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company and, if the instrument is not in the English language, a certified translation thereof in the English language;
  • The full address of the registered or principal office of the company;
  • A list of the directors and secretary of the company containing such particulars as may be prescribed;
  • The name and address or the names and addresses of one or more persons resident in India authorized to accept on behalf of the company service of process and any notices or other documents required to be served on the company;
  • The full address of the office of the company in India which is deemed to be its principal place of business in India;
  • Particulars of opening and closing of a place of business in India on earlier occasion or occasions;
  • A declaration that none of the directors of the company or the authorized representative in India has ever been convicted or debarred from the formation of companies and management in India or abroad; and Any other information as may be prescribed.

7.
What are the countries for which liaison office registration cannot be done under the automatic route and can be established only after prior approval is received from the RBI?

  1. Pakistan
  2. Bangladesh
  3. Sri Lanka
  4. Afghanistan
  5. Iran
  6. China
  7. Hong Kong
  8. Macau
  9. Or any application for opening of a branch office in Jammu & Kashmir, North East Region and Andaman and the Nicobar Islands.

8.
Who approves the setting up of a liaison office?

The RBI is empowered to approve the establishment of a liaison office in India, under master direction dated January 01, 2016 for the establishment of a place of a foreign corporation the powers have been delegated to any AD Category 1 Banker.

9.
How to set up a Liaison Office in India?

To set up a liaison office first check the eligibility of being financially sound in terms of the network not being less than USD 50,000 or its equivalent. Then call setindiabiz representative to discuss documentation and stepwise process. That's it, rest shall be taken care by the professionally qualified CA, CS and Advocates.

FAQ's

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