A liaison office lets a foreign company represent itself in India, promote collaborations and act as a communication channel, but it cannot earn any income in India. Approval is obtained through an Authorised Dealer bank under RBI's FEMA framework, and the foreign parent must meet track record and net worth criteria. After approval, the office registers with the ROC.
Permitted activities
- Representing the parent company in India
- Promoting export and import
- Promoting technical and financial collaboration
- Acting as a communication channel
Eligibility
The parent needs a profit-making track record and net worth as prescribed by RBI. Applicants not meeting the criteria may qualify with a letter of comfort from the parent group.
Process
- Submit Form FNC with documents to an AD bank.
- AD bank forwards to RBI or approves as per delegated powers.
- Obtain the Unique Identification Number.
- Register with the ROC and obtain PAN.
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- Annual Activity Certificate from a CA, filed with the AD bank and tax authorities
- Income tax filings as applicable
- Renewal of approval before expiry
Frequently asked questions
Can a liaison office sign contracts or invoice clients?
No. A liaison office cannot undertake commercial activity, sign sales contracts on its own account or earn income in India.
How long is liaison office approval valid?
Approval is generally granted for a fixed period, commonly three years, and can be extended on application.
Can a liaison office hire employees?
Yes. It can hire staff for its permitted activities, with salaries paid from inward remittances.
Can a liaison office be converted into a subsidiary?
A foreign company can close the liaison office and set up a subsidiary, transferring employees and assets as permitted.
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