A foreign company that has won a contract in India can set up a project office to execute it. Under FEMA, the AD bank can permit it if conditions are met, such as the project being funded by inward remittance or by a bilateral or multilateral agency, or cleared by the appropriate authority. The office registers with the ROC and closes when the project ends.
Conditions
- Contract secured from an Indian company
- Funding by inward remittance, multilateral agency or Indian bank loan, or authority clearance
Process
- Apply to AD bank with contract.
- Obtain permission and UIN.
- Register with ROC.
- Open bank accounts.
Operations
Limited to project activities; remit surplus on completion with documentation.
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Get expert help →Closure
On completion, close accounts, settle taxes and inform AD bank and ROC.
Frequently asked questions
Can a project office take other contracts?
No. It is limited to the specific project.
Is a PAN needed?
Yes, for tax filings.
Can multiple bank accounts be opened?
Yes, as permitted for the project.
Does it create a permanent establishment?
Often yes, and profits attributable are taxable in India.
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