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.

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What are the procedures to set up a Liaison Office in India?

For all the Foreign companies whoare willing to establish a Liaison Office in India, they need to obtain priorapproval from the Reserve Bank of India. This whole process may take up to 3 to4 weeks for processing the application. The life span of this approval will be3 years, and it can be renewed on expiry. If a body corporate, which isincorporated outside India, wants to open a Liaison Office, it must obtain suchpermission 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
What activities can a Liaison Office undertake?

  • 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
RBI imposed Eligibility Criteria to sanction a Liaison Office in India

Reserve bank of India has imposed certain criteria to set up a Liaison Office in India. These are-

  • The parent company must hold a track record of profit-making during the preceding 3 taxation years.
  • 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.
  • 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.
Salient features of Liaison Office

Reserve bank of India has imposed certain criteria to set up a Liaison Office in India. These are-

  • The parent company must hold a track record of profit-making during the preceding 3 taxation years.
  • 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.
  • 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.
Restrictions on operation of the Liaison Office
  • 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
How can VJM & Associates LLP help you in setting up a Liaison Office in India?
  • 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

What people say about us

What our clients say about us

By taking care of our Internal control policies and procedures, VJM Team have made sure that experience is hassle free.

Mr. sachin Jain
CFO, mahle filter system (i) pvt limited

Very professional approach from VJM Team, they got associated with us late in the financial year but were able to conduct an in depth audit and highlight the areas to be addressed within a short span of time. What gives us confidence is that they are available for consultation on any financial matter and are quick to find and implement the resolution

Mr. Shobit Bhatnagar
Gradeup.co

VJM team is a thoroughly professional chartered accountants equipped with all resources and with deep understanding of GST and other contemporary arenas of corporate consultancy. Have interacted with them for various tax and corporate law related matters and found the interaction quite useful.

Mr. Pawan Ladha
Freecharge

We are Repaibays Experts LLP. We are a new company and have just started our business in the field of AC charger installation. We have retained M/S VJM & Associates LLP; Chartered Accountants as CA for our company. They have a fairly large sized office and team and the whole environment seems professional and well organised: something which is very critical in this kind of business We wish VJM very well and am sure they are already a name to reckon with in the field of providing professional CA services !

Mr. Rajesh Singh
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The dedication and commitment of VJM Team is par excellence.  The team has handled the entire GST refund claim filing process very professionally within their immense experience and expertise.  Coupled with complete attention to detail at every stage and rigorous follow ups, VJM Team has supporrted us through the GST export refund and all GST Compliances.

Mr. Sumit Rajani
CEO, Umenders Exports

I hired VJM Associates and now I can completely focus on my business because I know there’s someone who is managing my accounts properly. Their team (including Khushboo and Jayant) are super supportive and friendly. I highly recommend VJM Associates. Give them a try! You won’t be disappointed

Mr. Vikrant Shaurya
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We give full credit to VJM for streamlining our company’s GST compliance. Their dedicated team of learned professionals have a focussed approach & exceptional clarity when it comes to any questions pertaining to GST. I can say, without their support, it would not have been possible for us to sail past the initial turbulent period when GST was launched. Our best wishes always with them !

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Highly recommended …
 “We have been clients of VJM associates for a few years now and have built up a great relationship with them. They are very professional but approachable and always willing to listen and provide valuable advice when needed. Their knowledge of financial and accounting matters is exceptional, and I really appreciate their responsiveness to any questions or queries we have.
A large part of any working relationship comes down to personalities and we've always found the VJM team friendly and trust them to do the best for our business”

Mr. Anuj Jain
CEO, Berkman Forwarding

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