Set up of Branch Office/Liaison Office

Setup Your Branch Office/Liaison Office/Project Office starting at Just ₹ 45,000/- only

 

Ideal for foreign entities

 

For starting business in India

 

Simple & Secure Online Process

 

Get your RBI compliances

 

Get Post Incorporation Assistance




Introduction

A Foreign Company incorporated outside India are allowed to set up their branch offices, Liaison offices or Project Offices in India for the limited purposes as specified by the Companies Act, 2013 and the Reserve Bank of India .

Branch Office in India: 

Branch Office as stated in section 2(13) of Companies Act, 2013 "office in relation to a company, means any establishment described as such by the company". With help Branch Office foreign companies can conduct their business in India in a full-fledged manner. Branch Offices are allowed to carry the same or substantially the same activities as carried out by their main/parent or group organizations. The Branch Offices are not allowed to directly indulge in carrying out the manufacturing activities as they are permitted to sub-contract such kind of services to an Indian manufacturer.

Liaison Office in India

Liaison Office also known as Representative office is primarily set up for exploring the business environment and for understanding the business and investment needs and climate of a country in which the parent company wants to diversify or through which the parent company facilitates its business. Liaison Office cannot conduct any commercial activities also and must use remittance received only from its parent foreign company to carry its activities.

Project Office in India

Project Offices are set up In India to create a presence for a limited period of time It is more or less like a branch office set up for executing a specific project like turnkey constructions, highways etc for carrying out their operations in India. Project Offices can represent the interest of the foreign company by undertaking the work of commercial activities in India if it has a secured contract with an Indian Company. These projects offices are duly registered with ROC and RBI, hence are preferred by foreign companies.  

Legal Window has team of experts providing you the best assistance, timely delivery and guaranteeing the highest customer satisfaction with respect to setting up of branch office or Liaison office or project Office in India. You may get in touch with our team on 072407-51000 or email admin@legalwindow.in for other Compliance services.

Conditions for Setup of Branch Office, Liaison Office and Project Office


Set Up of Branch Office

  • Foreign Parent Company must have net worth of at least $100,000 or equivalent
  • Five Financial Year records of parent company of its annual profit
  • The profits of the branch office can be remitted from India to its parent company after audit of books of A/c and payment of applicable taxes.
  • The name of foreign parent company and branch office must be same.


Set Up of Liaison Office

  • Foreign Parent Company must have net worth of at least $50,000 or equivalent
  • Three Financial Year records of parent company of its annual profit
  • The liaison office set up in India cannot earn any income in India. Must be financed from parent company.
  • The name of foreign parent company and branch office must be same.



Set Up of Project Office

  • Foreign Parent Company must have contract with Indian Company for the execution of a Project
  • The project must be approved and cleared from the appropriate authority.
  • The project is funded by inward remittance from abroad or International Financial Agency. In absence, Indian Entity will avail the loan from banks of India.
  • The Project Office must be opened within 6 months from the date of approval letter.

Documents Required for Incorporation

Passport size photo

PAN Card and Aadhar Card of the Authorized representative

Passport of Foreign Nationals

Business Address Proof
Owned:
Copy of Registry and Latest Electricity / Water Bill / Phone Bill

Business Address Proof
Rented/Leased:
Rent Agreement / NOC from the Owner and Latest Electricity / Water Bill / Phone Bill

POA/Board Resolution for appointing authorized representative

Specific Documents

Incorporation documents from the parent company translated in English

List of Directors and Shareholders of parent company

Details of shareholders of the applicant company

Net worth certificate attested by Certified Public Accountant (CPA)

 

Audited financial statement of the last Five/Three preceding years

 

Board Resolution from the parent Company for setting up of branch office / liaison office / project ofice in India

Banker’s Report from the applicant’s banker in the host country

Board Resolution for Opening Bank Account with the Banker

Note:-  In case of NRI or Foreign National documents of Directors and Subscribers must be notarized or apostilled and the documents must have been translated in English language other than the respective language of the said Country.

Process of Setup of Branch/Liaison /Project Office in India

1. Complete the Application Form
You are requested to first fill the simple questionnaire provided by our expert team which help us in analyzing you case.


2. Document Processing
At the second step we will be requiring the documents in accordance with the questionnaire filled and also as per the list stated above by you so that we can arrange them as per the requirement and for processing.

3. Application for DSC
First of all DSC (Digital Signature Certificate consisting of the E-signatures) is required to be prepared. This step can be ignored if prepared already. It will approximately take 1-2 days.


4. Filing of Application with AD Bankers
The application for set up of Branch Office/Liaison Office/Project Office of foreign company will be filed in FORM FNC (Annex B) to RBI through AD Bankers with which the company intends to have banking relations in future. The AD Bankers will verify the documents and If satisfied will forward the documents to RBI for allotment of UIN.

5. Approval from RBI for Set up
RBI shall approve the form by allotting a Unique Identity Number and intimate the AD Bankers who will issue the approval letter for setting up Branch Office/Liaison Office/Project Office of foreign company.

6. Preparation and E-filing for Registration with ROC
After the receipt of the approval from AD Banker, an application for registration of Branch Office/Liaison Office/Project Office of foreign company will be made to ROC in FORM FC-1 within 30 days with the appropriate documents as obtained.

7. Get Certificate of Incorporation
Lastly, after the approval a Certificate of Incorporation will be provided through e-mail which signifies that the office has been setup.

More Insights on Setup of Branch Office/Project Office/Liaison Office

  • A Branch Office is not given the status of separate legal entity and is subject to pay tax @ 40% plus surcharge and cess and shall be treated same as like its parent company.
  • No additional place of business can be introduced to the business or be started unless approval is taken from Reserve Bank of India.
  • Various other regulatory compliances are required to be made to Reserve Bank of India for both the Branch Office and the Liaison Office.
  • Renewal of Registration, the initial approval for operating a liaison office in India is granted for a period of three years which can be further extended to a period of another 3 years subject to compliances made and the permission granted by the Reserve Bank of India. The extension can be applied at least one or two months before the expiry of the initial time period.

 

FAQs on Setup of Branch Office/Project Office/Liaison Office

Whether a Branch Office requires PAN card ?

Yes, a Branch Office shall have a PAN Card for opening of bank accounts as well as for payment of tax for keeping a track of the monetary transactions;

Can a Branch Office acquire property in India?

The Investors who want to operates a Company through a branch office shall be allowed to purchase property in India as long as their respective assets are used for performing the company’s activities and the other associated operations. Foreign Companies cannot acquire property in India with the purpose of renting it.

 What are the two routes of Reserve Bank of India available ?

The application from the above entities are considered by the Reserve Bank of India under two routes which are :-

  • Automatic route – In this principal business of the foreign Company falls under such sectors where the government has allowed 100 percent of Foreign Direct Investment.
  • Government route – In this route principal business of the foreign Company falls under such sectors where the government has not permitted 100 percent FDI. Here applications from the entities falling under this category and the non-government organizations are considered in consultation with the Ministry of Finance, Government of India by the RBI.

 

What are the compliances to be done by the Company after receipt of Foreign Investment in lieu of shares?

A Company is required to file within 30 days of its allotment Form FCGPR along with the requisite documents with the RBI on FIRMS portal www.rbi.org.in.

Can I provide the residential place for registered office of the company?

Yes, You can register a Company at a commercial or residential place by providing the documents as specified. There is no restriction by the department.

How the net worth is calculated?

The formula for calculating Net Worth is as follows:-

Net Worth is total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement which shall be certified by a Certified Public Accountant or any Registered Accounts.

What are all annual compliances activities to be carried out by the Branch Office?

The Branch Office is required to carry the below mentioned activities every year:

  • Maintenance of the Books of Accounts;
  • Audit of Annual Accounts;
  • Filling of the Annual Activity Certificate with Reserve Bank of India;
  • Filling of the Annual Return and respective Balance sheet for the Financial Year ending with the Registrar of Companies;
  • Intimating the change in constitution of the Foreign Company to Reserve Bank of India & ROC if any;
  • Intimating the changes in the Directors of Foreign Company to RBI & ROC if any;
  • Intimating each and every change with respect to Branch Office to RBI & ROC;
  • No additional place of business can be introduced to the business or be started unless approval is taken from RBI.
For how much time registration to a liaison office is granted and for how much time it can be further extended?

The initial approval for operating a liaison office in India is granted for a period of three years which can be further extended to a period of another 3 years subject to compliances made and the permission granted by the Reserve Bank of India. The extension can be applied at least one or two months before the expiry of the initial time period.

What is Company Registration Certificate?

It is the documentary proof evidencing that the Company has been registered and having its unique identification number as Corporate Identification Number.

Is it mandatory to have an Auditor and if yes in what time period it is required to be appointed?

As per Companies Act, 2013 it is compulsory to have an individual or firm as an Auditor of a Company. The first Auditor shall be appointed within 30 days from the date of Incorporation by the Board of Directors .