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Liaison Office in India

Liaison Office Registration in India

A Liaison office operates as a representative office. Setting up a liaison office in India is the initial stage of exploring and understanding the business and investment type of the country. A Liaison Office can take part in liaison activities like building communication between parties in India and the Head Office in foreign countries.

 

So the role of such office is limited to acquiring enough information on possible market opportunities in India, providing adequate details of the parent company and its products, rendering enough particulars on the source of supply to the Indian consumers, or vice versa to its vendor.

Liaison Office in India
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For all the Foreign companies who are willing to establish a Liaison Office in India, they need to obtain prior approval from the Reserve Bank of India. This whole process may take up to 3 to 4 weeks for processing the application. The life span of this approval will be 3 years, and it can be renewed on expiry. If a body corporate, which is incorporated outside India, wants to open a Liaison Office, it must obtain such permission through an application in Form FNC. This application needs to be supported by-
  • Certificate of Registration/ Incorporation, or AOA & MOA attested by Indian Notary Public/ Indian Embassy in the country of registration
  • The latest audited balance sheet of the applicant
  • Representing the parent companies in India
  • Promoting the technical or financial collaborations between the parent company and companies in India
  • Promoting export or import services from or to India
  • Acting as the only bridge of communication between the parent company and Indian companies
Reserve bank of India has imposed certain criteria to set up a Liaison Office in India. These are-
  1. The parent company must hold a track record of profit-making during the preceding 3 taxation years.
  2. The total net worth of the foreign applicant company has to be equivalent to USD 50,000 or more than that, including Paid-up capital and free reserves.
  3. Every Liaison Office, which is registered with RBI, has to be registered under the Ministry of Corporate Affairs as a corporate entity. The registration of the Liaison Office is meant to establish a foreign company in India. The registrar will assign a Corporate Identity Number (CIN) to these companies.Note: In case, the foreign applicant company fails to satisfy the above-mentioned criteria and is a subsidiary of another company, it can submit a Letter of Comfort from the parent company, given that the parent company meets the eligibility criteria as set by RBI. After a proper checking, AD bank must forward the application to the Reserve Bank along with their comments. Once the application gets approval from RBI, the applicant will be allotted a UIN (Unique Identification Number). After that, they shall obtain PAN (Permanent Account Number) from the Income Tax Authorities for setting up the Liaison Office in India.
  1. The name of the Liaison Office should be given after the name of the parent company
  2. Reserve Bank of India or AD banker will be the governing body for the Liaison Office
  3. This office doesn’t have any kind of ownership; instead, it’s an extension of the existing foreign parent company
  4. Liaison Office is the best for the foreign companies who are looking to build a temporary office in India to liaison the existing business with Indian clients
  5. All the expenses of Liaison Office come from the head office located abroad, so the funds must be credited from the head office account only
  6. Liaison Office in India is not liable to pay tax in India as the Income-tax department doesn’t have any mechanism to check whether the undertaken liaison activities are subjected to pay tax or not
  • Liaison Office is not allowed to undertake any kind of direct or indirect trading, commercial, or industrial activity; so they can’t earn any money in India
  • A Liaison Office can’t borrow or lend money in India
  • It cannot hold, acquire, dispose or transfer any immovable property of India without any prior approval of RBI
We can assist you through the process of establishing a Liaison Office in India. We can help you in-
  • Obtaining approval from the Reserve Bank of India
  • Acquiring CIN for your Liaison Office
  • Getting your Liaison Office registered with the Registrar of Companies
  • Maintaining the Financial books of Accounts of your Liaison Office
  • Doing Annual Audit of Books of accounts
  • Payroll processing
  • Reporting of the Liaison Office on an annual basis with the concerned authorities
  • Getting the Statutory Compliances done within the stipulated time
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Services for Foreign Companies

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The global economic growth has already started its journey of shifting towards developing nations. Being one of the fastest-growing economies in the world, India offers plenty of opportunity to businesses looking to expand their operations in India. A physical existence is what you need to break into India’s developing business sector. However, the right kind of presence can be the make or break.

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Foreign companies looking for a limited presence in India should opt for setting up a project office in the country. It is the ideal method for companies who have the objective of completing a project within a specific time frame. Foreign companies need to get approval from the Reserve Bank of India and register themselves with the RoC if they have a contract to execute a project in India.

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Transfer pricing is all about determining the nature, treatment and taxability of intra-group transactions across several geographies. The transaction is put to test by the determination of arm’s length price of the transaction as per the prescribed transfer pricing methodologies.

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If you are looking for a trustworthy partner or a reliable FEMA advisior, we will be the right fit for you. We keep a world-class pool of professional FEMA consultants to provide you with a complete solution, covering almost all areas of FEMA, bookkeeping and accounting tasks, GST returns etc.

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Client is the key driver of our service offerings. Our approach to service offerings is based on a client centric and customized approach. Our specialized teams are a mix of technical and industry experience in order to serve clientele for their specific needs.

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