25
May

Setting Up of Branch/Liaison/Project Offices in India

If you’re a foreign business entity looking to seek the opportunity to setup business in India, then you’ve come to the right place. Administrative formalities can be confusing especially when you have unlimited options. We are here to help you sort your options and reach a decision beneficial for you.

While setting up your company in India, you need to decide whether you want to establish yourself as an Indian or a foreign company. In this article, we’re going to discuss the procedure associated with setting you up as a foreign company.

To be precise, you have 3 options which include setting up a branch office, liaison office, or a project office. Let’s discuss their procedure one by one.

 

  1. Branch Office: Building a branch office basically works as an extension for your head office, located overseas. If you want to expand your business in India on a relatively permanent basis, incorporating a branch office is the best option you have.

 

What’s the procedure?

  • The first thing you need is to do is name your company. According to Indian norms, it has to be the same as your head office.
  • You need to get legal approval from the Reserve Bank of India (RBI).
  • Your net worth cannot be less than at least $100,000.
  • The goodwill and financial record of your company must be stable (your business needs to be profitable) as your company’s history is stringently tracked.

 

  1. Liaison Office: In accordance with the Foreign Exchange Management Act (FEMA), a liaison office is “a place of business to act as a channel of communication between the principal place of business or Head Office by whatever name called and entities in India but which does not undertake any commercial / trading / industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel”.

 

What’s the procedure?

  • Open your authorized dealer bank account
  • File an application to RBI and get approval
  • Apply for registration of PAN and TAN with income tax authorities
  • Get yourself incorporated under Shop and Establishment Act
  • Get your export-import code
  • The process might take up to 4-6 months.

 

  1. Project Office: If you wish to establish your business in India on a temporary basis, this is the option you should go for. Setting up a project office in India gives you the liberty to work on, set up, or expand any of the business projects of your parent company in your native company. However, the project has to be funded by your head office.

 

What’s the procedure?

  • Self-attest your identify and address documents and get them approved by the RBI.
  • Fill the FNC form and file it for RBI’s examination through you Authorized Dealer bank.
  • Afterwards, your documents are sent for verification to the banker of your country to obtain a KYC.
  • Apply for ROC and make sure you attach your DIN number with the form.
  • Get your PAN and TAN numbers.
  • Get your certificate and license.