{"id":10973,"date":"2021-02-27T23:17:43","date_gmt":"2021-02-27T17:47:43","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=10973"},"modified":"2022-07-26T14:27:27","modified_gmt":"2022-07-26T08:57:27","slug":"establish-the-branch-office-liaison-office-project-office-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/","title":{"rendered":"Branch office\/Liaison office\/Project office in\u00a0India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e1537046335\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e1537046335\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#How_to_Establish_the_Branch_office_BO_Liaison_office_LO_or_Project_office_PO_in_India\" title=\"How to Establish the Branch office (BO), Liaison office (LO) or Project office (PO) in India\">How to Establish the Branch office (BO), Liaison office (LO) or Project office (PO) in India<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Establishment_of_Liaison_office_and_Branch_office_in_Indian\" title=\"Establishment of Liaison office and Branch office in Indian:\">Establishment of Liaison office and Branch office in Indian:<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Permission_for_established_a_Liaison_Office_and_Branch_Office_in_India\" title=\"Permission for established a Liaison Office and Branch Office in India\">Permission for established a Liaison Office and Branch Office in India<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#For_Liaison_Office\" title=\"For Liaison Office:\">For Liaison Office:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#For_Branch_office\" title=\"For Branch office:\">For Branch office:<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Application_for_the_establishment_of_a_Liaison_office_and_Branch_office_in_India\" title=\"Application for the establishment of a Liaison office and Branch office in India \">Application for the establishment of a Liaison office and Branch office in India <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Establishment_in_India_of_the_Project_Office_PO_Permitted\" title=\"Establishment in India of the Project Office (PO) Permitted\">Establishment in India of the Project Office (PO) Permitted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#11_Establishment_of_Project_Office_PO_by_the_Foreign_Companies_in_India\" title=\"1.1 Establishment of Project Office (PO) by the Foreign Companies\u00a0in India.\">1.1 Establishment of Project Office (PO) by the Foreign Companies\u00a0in India.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Special_provisions_for_the_Liaison_officeBranch_officeProject_office_in_India\" title=\"Special provisions for the Liaison office\/Branch office\/Project office in India.\">Special provisions for the Liaison office\/Branch office\/Project office in India.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Acquisition_of_Immovable_Property_in_India_by_BOLOPO\" title=\"Acquisition\u00a0of Immovable Property in India\u00a0by BO\/LO\/PO\">Acquisition\u00a0of Immovable Property in India\u00a0by BO\/LO\/PO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Miscellaneous_Provisions_for_BOLO_in_India\" title=\"Miscellaneous\u00a0Provisions for\u00a0BO\/LO\u00a0in India \">Miscellaneous\u00a0Provisions for\u00a0BO\/LO\u00a0in India <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Winding_up_of_a_Branch_office_in_India\" title=\"Winding up\u00a0of a Branch office in India.\">Winding up\u00a0of a Branch office in India.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Application_for_additional_establishment_of_BOLO_in_India\" title=\"Application for additional establishment of BO\/LO in India\">Application for additional establishment of BO\/LO in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Submission_of_Annual_Activity_Certificate_AAC_for_BOLO_in_India\" title=\"Submission of\u00a0Annual Activity Certificate (AAC)\u00a0for BO\/LO in India\">Submission of\u00a0Annual Activity Certificate (AAC)\u00a0for BO\/LO in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Role_of_Designated_AD_Category_%E2%80%93_I_Bank_at_the_Time_of_BOLO_Closure\" title=\"Role of Designated AD Category &#8211; I Bank at the Time of BO\/LO Closure\">Role of Designated AD Category &#8211; I Bank at the Time of BO\/LO Closure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#RBI_approval_for_the_establishment_of_a_LO\" title=\"RBI approval for the establishment of a LO\">RBI approval for the establishment of a LO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/establish-the-branch-office-liaison-office-project-office-in-india\/#Conclusion_on_BOLOestablishment_POs_in_India\" title=\"Conclusion on BO\/LO\/establishment PO&#8217;s in India\">Conclusion on BO\/LO\/establishment PO&#8217;s in India<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><a style=\"font-size: 16px;\" href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/2-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-11543\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/2-1.jpg\" alt=\"www.carajput.com; ForeignCompany\" width=\"832\" height=\"478\" \/><\/a><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Establish_the_Branch_office_BO_Liaison_office_LO_or_Project_office_PO_in_India\"><\/span><strong style=\"font-size: 16px;\">How to Establish the Branch office (BO), Liaison office (LO) or Project office (PO) in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Eligible foreign Companies are permitted to the establishment of <strong>Liaison Office<\/strong> and <strong>Branch Office <\/strong>(Commonly known as <strong><em>Representative Office<\/em><\/strong>) and <strong>Project Office<\/strong> in India under the specific or general &#8216;approval&#8217; route by the RBI and Government of India. Eligible\u00a0Foreign Companies includes the following companies:<\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/LO.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-10976\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/LO.jpg\" alt=\"www.carajput.com;RBI approval for branch\/laision and project office\" width=\"829\" height=\"464\" \/><\/a><\/p>\n<ul>\n<li>Foreign companies<\/li>\n<li>Foreign non-governmental organizations (NGOs)<\/li>\n<li>Foreign non-profit organizations (c) (NPOs)<\/li>\n<li>Foreign Govt. Bodies<\/li>\n<li>Departments of Foreign Govt.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Establishment_of_Liaison_office_and_Branch_office_in_Indian\"><\/span><strong>Establishment of Liaison office and Branch office in Indian:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Permission_for_established_a_Liaison_Office_and_Branch_Office_in_India\"><\/span><span style=\"color: #000080;\"><strong>Permission for established a Liaison Office and Branch Office in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>(i) RBI General Approval (commonly referred to as the &#8216;RBI&#8217; Route)<\/p>\n<p>Eligible foreign companies are required to submit an application with the RBI to establish <strong><em>Liaison Office<\/em><\/strong> and <strong><em>Branch Office<\/em><\/strong> in India in the <a href=\"https:\/\/rbidocs.rbi.org.in\/rdocs\/Forms\/PDFs\/form-fnc1.pdf\">form\u00a0FNC<\/a> under the RBI general approval route through the authorized AD Category-I bank if foreign companies are involved in the sector where 100% FDIs are permitted in India<\/p>\n<p>(ii) Specific approval by the Govt\u00a0 of India (commonly referred to as the &#8216;Government&#8217; Route)<\/p>\n<p>Eligible foreign companies are required to submit an application with the RBI through the designated AD Category-I bank for the establishment of the Liaison Office and Branch Office in India in the <a href=\"https:\/\/rbidocs.rbi.org.in\/rdocs\/Forms\/PDFs\/form-fnc1.pdf\">form\u00a0FNC<\/a> under the specific approval procedure, where the RBI requires specific approval from the concerned Ministry or Department of Government of India in the following circumstance.<\/p>\n<p>(a)Establishment of Liaison office and Branch office by foreign NGOs, NPOs, Governing Bodies or Governing\u00a0department.<\/p>\n<p>(b) Applicant is registered or incorporated\u00a0in Pakistan for establishment in &#8216;any&#8217; location in India.<\/p>\n<p>(c) The applicant is a registered\/unregistered entity for the establishment of a Liaison Office or Branch Office in Jammu and Kashmir\/ North East States \/Andaman and Nicobar Island in the following 7\u00a0countries as follows;<\/p>\n<ol>\n<li>Sri Lanka<\/li>\n<li>Iran<\/li>\n<li>China<\/li>\n<li>Afghanistan<\/li>\n<li>Hong Kong<\/li>\n<li>Macao<\/li>\n<li>Bangladesh<\/li>\n<\/ol>\n<p>(d) The Parents companies\u2019 of the applicant are not permitted\u00a0in 5 of the following sectors:<\/p>\n<ul>\n<li>Telecom<\/li>\n<li>defense<\/li>\n<li>Private Security<\/li>\n<li>Info and Broadcasting<\/li>\n<li>Foreign companies are involved in the sector where 100% of FDIs in India.<\/li>\n<\/ul>\n<p>(iii) The other Foreign Companies that are \u201cNot permitted\u201d to establish in India are as follows:<\/p>\n<ul>\n<li>Partnership firm<\/li>\n<li>Association of Individuals<\/li>\n<li>Proprietary Concern<\/li>\n<\/ul>\n<p>(iv) Mandatory approval requirements under the RBI Route:<\/p>\n<p>The RBI is required to consider 2 criteria:<\/p>\n<ol>\n<li><strong>Track record<\/strong><\/li>\n<li><strong>Net value <\/strong><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"For_Liaison_Office\"><\/span><span style=\"color: #000080;\"><strong>For Liaison Office:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-10975\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png\" alt=\"www.carajput.com; Laision office\" width=\"836\" height=\"427\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png 321w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3-300x153.png 300w\" sizes=\"(max-width: 836px) 100vw, 836px\" \/><\/a><\/p>\n<ul>\n<li>Foreign Company must have a record of profit-making in their home country during the immediately preceding 3 financial years<\/li>\n<li>The minimum net worth in the home country\u00a0should be <em>USD 50 thousand.<\/em><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"For_Branch_office\"><\/span><span style=\"color: #000080;\"><strong>For Branch office:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-10975\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png\" alt=\"\" width=\"875\" height=\"447\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3.png 321w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Picture3-300x153.png 300w\" sizes=\"(max-width: 875px) 100vw, 875px\" \/><\/a><\/p>\n<ul>\n<li><span style=\"color: #000080;\"><strong>In case For Branch office:<\/strong><\/span> Foreign companies should have a record of profit-making in their home country during the immediately preceding 5 financial years<\/li>\n<li><span style=\"color: #000080;\"><strong>For Branch office<\/strong>: T<\/span>he minimum net worth\u00a0in the home country should be\u00a0<em>USD 1 Lakh.<\/em><\/li>\n<\/ul>\n<p><strong>Net worth<\/strong> includes <strong><u>total paid-up capital + Free Reserves &#8211; Intangible assets<\/u><\/strong> as per the latest audited balance sheet or account statement as certified by Certified Public Account (CPA) or any Registered Account Practitioner<\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Application_for_the_establishment_of_a_Liaison_office_and_Branch_office_in_India\"><\/span><span style=\"color: #000080;\"><strong>Application for the establishment of a Liaison office and Branch office in India <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>(i)\u00a0Submission of an application for establishment Liaison office and Branch office in India<\/p>\n<p>(a) \u00a0The application for the establishment of a Liaison office or Branch office should be forwarded to the RBI by a foreign company through the designated AD Category-I bank for approval.<\/p>\n<p>Designated AD Category-I bank is needed to obtain the Unique Identification Number (UIN) along with specified documents from the concerned general manager in charge, Foreign Exchange Department, Central Office Cell, RBI, New Delhi, Regional Office, 6 Parliament Street, New Delhi-110001<\/p>\n<p>(b) Following are the List of Documents and it should be in the English version<\/p>\n<ul>\n<li>Certificate of incorporation<\/li>\n<li>Registration\u00a0and Memorandum and Article of Association (M&amp;A)<\/li>\n<li>Audited Balance Sheet that must be attested\u00a0by an Indian embassy or notary public in the country of registration outside of India<\/li>\n<\/ul>\n<p>(c) <span style=\"color: #000080;\"><strong>Letter of Comfort<\/strong>:<\/span> \u00a0Letter of Comfort (LOC) from the parent company must be submitted if applicants do not satisfy the eligibility criteria\u00a0<em>i.e.\u00a0track record and\/or net worth<\/em><\/p>\n<p>(d)<span style=\"color: #000080;\"> <strong>Due Diligence<\/strong>:<\/span> Designated\u00a0AD category-I bank is required to carry out due diligence on the following matters.<\/p>\n<ul>\n<li>Background of the applicant<\/li>\n<li>Background of the promoter<\/li>\n<li>The nature &amp; location of the activity<\/li>\n<li>Fund Sources<\/li>\n<li>Compliance with KYC requirements before submitting an application\u00a0along with feedback or recommendations to the RBI to obtain the UIN number\u00a0and approval.<\/li>\n<\/ul>\n<p>(ii) <span style=\"color: #000080;\"><strong>Allotment of the UIN number<\/strong>:<\/span> The RBI is required to assign the Liaison office or Branch office a unique Identification Number (UIN).<\/p>\n<p>(iii)<span style=\"color: #000080;\"> <strong>The allocation of PAN card<\/strong>:<\/span> The liaison office or Branch office is required to obtain a PAN card for the Income Tax Authorities in India.<\/p>\n<ul>\n<li><span style=\"color: #000080;\"><strong>Permitted and not permitted (Prohibited) activities in India for the Liaison office and Project Office:<\/strong><\/span><\/li>\n<\/ul>\n<ol>\n<li><span style=\"color: #000080;\"><strong>Liaison Office<\/strong><\/span><\/li>\n<\/ol>\n<p>Permitted activities in India for the Liaison Office are as follows:<\/p>\n<ul>\n<li>Representing on behalf of the parent company or Group of Company in India.<\/li>\n<li>Encouraging import\/export\u00a0from\/to India<\/li>\n<li>Supporting technical\/financial alliances between parent\/group companies and companies in India.<\/li>\n<li>Functioning as a channel of communication between the parent company and Indian companies.<\/li>\n<\/ul>\n<p>Practices for the Liaison offices that are not permitted (prohibited) in India<\/p>\n<ul>\n<li>It is prohibited to participate in any commercial\/trading\u00a0practice in India; (b) It is prohibited to earn any income in India.<\/li>\n<li>It is prohibited to incur\u00a0expenses other than direct inward remittances\u00a0in foreign exchange from the head office outside India<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Role of Foreign insurance company, a foreign bank, or a foreign law firm in establishing a Liaison Office.<\/strong><\/span><\/p>\n<p><span style=\"color: #000080;\"><strong>(i) Liaison office of the Foreign Insurance Company in India<\/strong><\/span><\/p>\n<p>After obtaining approval from the <strong>Insurance Regulatory and Development Authority (IRDA)<\/strong> as according to the RBI in India then only the foreign insurance company is permitted to establish a Liaison office.<\/p>\n<p><span style=\"color: #000080;\"><strong>(ii) Liaison office of the Foreign Bank\u00a0in India<\/strong><\/span><\/p>\n<p>After obtaining approval from the <strong>Department of Banking Operations and Development (DBOD)<\/strong> as accordance to RBI in India then only\u00a0the foreign bank is permitted to establish a Liaison office.<\/p>\n<p><span style=\"color: #000080;\"><strong>(iii) Liaison office of the\u00a0Foreign Law Firm in India<\/strong><\/span><\/p>\n<p>Fresh permission or renewal is not permitted for the Liaison office of a foreign law firm. However already approved are allowed to continue until the day of its expiry.<\/p>\n<p><span style=\"color: #000080;\"><strong>1.2 Extension of the approval\u00a0of a LO Permitted\u00a0in India<\/strong><\/span><\/p>\n<p>(i) Designated AD category &#8211; I bank is approved to extend the Liaison office\u2019s validity for a period of 3 years from the date of expiry of the original or extension if the applicant has satisfied the following terms and conditions.<\/p>\n<ul>\n<li>LO should have to submit the\u00a0<strong>Annual Activity Certificates (AACs)<\/strong> for the all\u00a0previous year<\/li>\n<li>LO should have to maintain an account with the designated AD Category -I bank in compliance with the terms and conditions as stipulated in approval.<\/li>\n<\/ul>\n<p>(ii) The extension shall be granted\u00a0by Designated\u00a0AD Category-I bank within 1 month from\u00a0date of the request under intimation to the RBI, along with the\u00a0reference number of the original letter of approval and UIN number.<\/p>\n<p>(iii) Extending the Validity of an Insurance Company&#8217;s and a Bank&#8217;s Liaison office\u00a0in India.<\/p>\n<p>Insurance companies and banks must submit the application to the <strong>Insurance Regulatory and Development Authority<\/strong> (IRDA) and <strong>Department of Banking Operations and Development (<\/strong>DBOD) to extend the validity of the Liaison office\u2019s period<\/p>\n<ol start=\"2\">\n<li><span style=\"color: #000080;\"><strong>2<\/strong>. <strong>Branch office<\/strong><\/span><\/li>\n<\/ol>\n<p>Permitted activities for the Branch office are as follows:<\/p>\n<ul>\n<li>Conduct research work in which the parent company must engage.<\/li>\n<li>Export\/Import activities of Goods<\/li>\n<li>Developing technological or financial alliances between Indian companies and parent companies or groups of foreign companies.<\/li>\n<li>Providing\u00a0Professional or Consultancy services.<\/li>\n<li>Operating in India as the buying\/selling agent to representing the parent company in India.<\/li>\n<li>Providing facilities in\u00a0Information Technology (IT)\u00a0and software development in India.<\/li>\n<li>The Providing Facilities in technical support for goods supplied by parent\/group companies.<\/li>\n<li>International airline operations or shipping activities in India.<\/li>\n<\/ul>\n<p>Practices for the Branch office that are not permitted (prohibited) in India are as follows:<\/p>\n<ul>\n<li>Retail Trading Activities\u00a0are not permitted\u00a0by a BO in India<\/li>\n<li>Manufacturing or processing activities are not permitted for BO in India.<\/li>\n<\/ul>\n<p>However, incorporating a subsidiary business in India is permitted.<\/p>\n<p><span style=\"color: #000080;\"><strong>2.1 Remittances against Profits by the BO are permitted.<\/strong><\/span><\/p>\n<p>Branch offices are allowed to remit Outside India against profits &#8216;after&#8217; the payment of taxes. Following documents shall be submitted for remittances<\/p>\n<ul>\n<li>Certified copy of the Indian BO&#8217;s audited balance sheet and profit and loss account<\/li>\n<li>Certificate of Chartered Accountant certifying the manner arrives remittable profit\u00a0\u00a0and also the entire remittable profit is earned by BO from &#8216;permitted&#8217; activities but also profit does not include a profit on revaluation of BO&#8217;s assets in India<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Establishment_in_India_of_the_Project_Office_PO_Permitted\"><\/span><span style=\"color: #000080;\"><strong>Establishment in India of the Project Office (PO) Permitted<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"11_Establishment_of_Project_Office_PO_by_the_Foreign_Companies_in_India\"><\/span><span style=\"color: #000080;\"><strong>1.1 Establishment of Project Office (PO) by the Foreign Companies\u00a0in India.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The RBI has granted foreign companies a general or specific &#8216;approval&#8217; route for establishing a Project Office in India.<\/p>\n<p>However, Project Office should obtain a contact from an Indian company in order to execute the project in India.<\/p>\n<ul>\n<li>Project\u00a0should be funded by inward remittance from\u00a0Outside India &#8216;or&#8217;<\/li>\n<li>A bilateral or multilateral Foreign Financial\u00a0Agency can finance the project \u2018and&#8217;\u00a0also,<\/li>\n<li>Project must be authorized by a relevant Indian authority \u2018and&#8217;<\/li>\n<li>The Indian Company should obtain a term loan from the Public Financial Institution or bank for the project in India for the award of the contract.<\/li>\n<\/ul>\n<p>In the absence of the above mentioned, a foreign company is required to obtain a specific permission from the RBI through the designated AD Category-\u00a0I bank in India.S<\/p>\n<ul>\n<li><strong>Bank account for the PO: <\/strong>After satisfying the following terms and conditions the designated AD category-I bank can open a \u2018non-interest bearing&#8217; foreign currency account for the PO in India.<\/li>\n<li>PO should be established with the general or specific &#8216;approval&#8217; route from the RBI &#8216;and\u00a0from the relevant project sanctioning authority.<\/li>\n<li>Project should specifically provide for payment in foreign currency only<\/li>\n<li>PO is permitted to\u00a0open 2 foreign currency accounts with the same designated AD Category-I bank, one in USD and one in non-USD, respectively.<\/li>\n<li>Project-related expenses are permissible debits to the account and permissible credits to the account are only foreign currency receipts from a foreign company.<\/li>\n<li>A designated AD Category-I bank must ensure that permissible debits and credits are permitted in the foreign currency account, as well as that the account is duly inspected by the bank&#8217;s concurrent auditor.<\/li>\n<li>The foreign currency account must be closed at the time the project is completed.<\/li>\n<\/ul>\n<p><strong>Remittances by the PO: <\/strong>Designated AD Category-I bank is permitted to remit\u00a0by the PO as pending\u00a0completion or winding up\u00a0completion of the project after the following terms and conditions have to be satisfied.<\/p>\n<ul>\n<li>The PO should submit an auditor&#8217;s certificate confirming that all liabilities, including income taxes\u00a0have been paid.<\/li>\n<li>PO should submit an undertaking since remittance will not hinder the completion of the project in India, and any funding shortfall will be obtained by inward remittance from outside India.<\/li>\n<li><strong>Inter Project Transfer of Funds in India<\/strong>:\u00a0Prior RBI permission is needed for inter project fund transfers in India.<\/li>\n<\/ul>\n<p><strong>Reporting\u00a0to the RBI\u00a0by Project office in India<\/strong><\/p>\n<p>The foreign entity shall, within 2 months from the date of establishment of the PO, provide the following information to the RBI through the Designated AD Category-I bank in the form of FNC.<\/p>\n<ul>\n<li>Name and address of Foreign Company<\/li>\n<li>Reference number and date of letter against contract granted in In accordance with Regulation No. 5(ii) of Notification No. FEMA 22\/2000-RB, dated May 03, 2000,<\/li>\n<li>particulars of authority\u00a0as granting\u00a0of the project or contract to the PO<\/li>\n<li>The total amount of the Project<\/li>\n<li>address, e-mail and telephone number of PO in India<\/li>\n<li>Tenure of PO in India<\/li>\n<li>A brief description of the project<\/li>\n<li>Name of the designated AD category &#8211; I bank\u00a0for opening a foreign currency account\u00a0in USD and &#8216;non&#8217; USD<\/li>\n<li>The undertaking that the PO is entitled to obtain General Permission\u00a0in accordance with Regulation No. 5(ii) of Notification No. 22 of 03 May 2000\u00a0read with Notification No. 95 of 02 July 2003.<\/li>\n<\/ul>\n<p>The Project office must submit a certificate from a Chartered Accountant specifying the project&#8217;s status and ensuring that the PO&#8217;s accounts have been audited and that the activities carried out are in accordance with\u00a0general or specific approval by the RBI.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Special_provisions_for_the_Liaison_officeBranch_officeProject_office_in_India\"><\/span><span style=\"color: #000080;\"><strong>Special provisions for the Liaison office\/Branch office\/Project office in India.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"Acquisition_of_Immovable_Property_in_India_by_BOLOPO\"><\/span><span style=\"color: #000080;\"><strong>Acquisition\u00a0of Immovable Property in India\u00a0by BO\/LO\/PO<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>BO or PO in India is permitted to purchase the immovable property if necessary or incidental to carry on the activities of the BO\/PO as the case may be.<\/li>\n<li>Payments for the purchase of the immovable property are to be made through the normal banking channel out of the foreign inward remittance only.<\/li>\n<li>The declaration is to be submitted to the RBI in Form IPI within 90 days of the date of purchase of the immovable property.<\/li>\n<li>Sale proceeds of the property on winding-up shall be repatriated with the approval of the RBI.\n<ul>\n<li>However, RBI approval\u00a0also required to acquire immovable property by\u00a0a company incorporated in 10 countries.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li>China<\/li>\n<li>Pakistan<\/li>\n<li>Bangladesh<\/li>\n<li>Iran<\/li>\n<li>Nepal<\/li>\n<li>Bhutan<\/li>\n<li>Hong Kong<\/li>\n<li>Macau<\/li>\n<li>Sri Lanka<\/li>\n<li>Afghanistan<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<ul>\n<li>LO is not permitted to acquire immovable property in India from any country. However, LO is permitted to acquire immovable property on lease &#8216;not&#8217; for more than 5 years from &#8216;any&#8217; country.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>General Conditions BO\/LO<\/strong><\/span><\/p>\n<ul>\n<li>Companies\u00a0from Nepal are permitted to establish a LO but are not permitted to establish a BO in India.<\/li>\n<li>BO\/LO is required to open a non-interest-bearing INR current account in India.<\/li>\n<li>RBI approval is required in order to transfer of\u00a0assets to subsidiaries or other BOs.<\/li>\n<li>Term deposits of more than 6 months shall not be permitted against temporary surplus funds of the BO\/LO<\/li>\n<li>However, term deposits shall not be permitted for shipping or airline companies operating in India.<\/li>\n<li>BO\/LO regularization is required if it was established before FEMA, i.e. before 1999,<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Additional Reporting to Police for establishing New or fresh LO\/PO<\/strong><\/span><\/p>\n<p>Following &#8216;Additional&#8217; Reporting required for establishing new Liaison office \/ Project office<\/p>\n<ul>\n<li>Submit a report containing certain information to the Director General of Police (DGP) of the State\/Union Territory within 5 working days of BO\/LO become functional<\/li>\n<li>The same report shall be submitted on annual basis to DGP along with AAC in India.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Miscellaneous_Provisions_for_BOLO_in_India\"><\/span><span style=\"color: #000080;\"><strong>Miscellaneous\u00a0Provisions for\u00a0BO\/LO\u00a0in India <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000080;\"><strong>Establishment of a BO in Special economic zones (SEZs).<\/strong><\/span><\/li>\n<\/ul>\n<p>RBI has given general permission to foreign companies to establish a BO or unit in the SEZ region to carry out manufacturing and service activities (b) General permission to carry out manufacturing and service activities is available after fulfillment of the following terms and conditions:<\/p>\n<ul>\n<li>The orgination must work in a sector that makes 100 % foreign direct investment.<\/li>\n<li>Branch Office must comply with the provisions of Sections 380 to 386 of the Companies Act, 2013.<\/li>\n<li>The unit must operate on a stand-alone basis only.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Winding_up_of_a_Branch_office_in_India\"><\/span><span style=\"color: #000080;\"><strong>Winding up\u00a0of a Branch office in India.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The BO must require to approach the designated AD Category-I bank with documents mentioning the BO&#8217;s closure for remittance of winding-up proceeds outside Away from India<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Application_for_additional_establishment_of_BOLO_in_India\"><\/span><span style=\"color: #000080;\"><strong>Application for additional establishment of BO\/LO in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>An\u00a0application for additional BO\/LO must be required to submitted to the RBI through a specified AD Category -I Bank where\u00a0specific approval is required for the establishment of a BO\/LO,<\/li>\n<li>Fresh FNC form required to\u00a0be submitted for an additional BO\/LO<\/li>\n<li>However, documents should\u00a0not be re-submitted because\u00a0there is no\u00a0change in the documents which are\u00a0&#8216;already&#8217; submitted.<\/li>\n<li>A\u00a0justification for the additional BO\/LO must be submitted if\u00a0the number of BOs\/LOs are exceeding\u00a0by 4\u00a0in India,<\/li>\n<li>In order to organize the activities of all offices in India, the applicant is required to identify one office as a nodal office.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Submission_of_Annual_Activity_Certificate_AAC_for_BOLO_in_India\"><\/span><span style=\"color: #000080;\"><strong>Submission of\u00a0Annual Activity Certificate (AAC)\u00a0for BO\/LO in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>BO\/LO is required to submit an Annual Activity Certificate (AAC) as on\u00a031 March to 30 September of\u00a0each year to the following.<\/li>\n<li>Designated AD Category-I bank in India<\/li>\n<li>The DGIT (International Taxation) New Delhi<\/li>\n<li>DGP\u00a0State\/Union Territory<\/li>\n<li>The Annual Activity Certificate (AAC) should also be submitted by the BO\/LO or By the Nodal Office if there are multiple BO\/LOs in India<\/li>\n<li>Designated AD Category -I banks are expected to scrutinize the Annual Activity Certificate (AAC) to ensure that the activities carried out by BO\/LO are in accordance with the RBI terms and conditions.<\/li>\n<li>The Designated AD Category -I banks are required to report to the RBI if negative comments\/reports have been made by statutory auditors<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Documents must be submitted at the time of closure of the BO\/LO are mention below:\u00a0<\/strong><\/span><\/p>\n<ul>\n<li>Copy of the approval for the establishment of the BO\/LO in India<\/li>\n<li>A certificate from the statutory auditors is required for the computation of the remittable amount.<\/li>\n<li>NOC from the Income Tax authority for remittance<\/li>\n<li>Undertaking from the applicant\u00a0that no legal proceedings are pending in\u00a0any court in India<\/li>\n<li>The ROC report in accordance with the provisions of the Companies Act, 2013<\/li>\n<li>Any other document as specified\u00a0at the time of approval.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Role_of_Designated_AD_Category_%E2%80%93_I_Bank_at_the_Time_of_BOLO_Closure\"><\/span><span style=\"color: #000080;\"><strong>Role of Designated AD Category &#8211; I Bank at the Time of BO\/LO Closure<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Designated AD Category &#8211; I Bank is required to ensure that the BO\/LO have submitted all Annual Activity Certificate\u2019s (AACs)<\/li>\n<li>Also to report to the RBI along with a declaration stating that all required documents submitted by the BO\/LO have been scrutinized and found to be in order.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"RBI_approval_for_the_establishment_of_a_LO\"><\/span><span style=\"color: #000080;\"><strong>RBI approval for the establishment of a LO<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In general, the RBI takes about 40 days to grant permission for the establishment of a LO in India.<\/li>\n<li>RBI generally grants a permit for a maximum period of 3 years<\/li>\n<li>The RBI generally allows an extension for a maximum period of 3 years &#8216;each time&#8217;<\/li>\n<li>Once the original or extended approval has expired, LO is required to close the establishment in India. However, LO is permitted to convert\u00a0the company into a joint venture or wholly owned subsidiary in India.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Registration and annual filings with the MCA for the BO\/LO<\/strong><\/span><\/p>\n<ul>\n<li>Within 30 days of its establishment, a BO\/LO must register with the ROC by filing an e-form FC-1 with the ROC.<\/li>\n<li>For the financial statement and annual return, BO\/LO required to\u00a0file e-forms FC-3 and FC-4.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion_on_BOLOestablishment_POs_in_India\"><\/span><span style=\"color: #000080;\"><strong>Conclusion on BO\/LO\/establishment PO&#8217;s in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>The establishment of a BO\/LO is permitted\u00a0under the\u00a0head<\/li>\n<li>General permission (&#8216;RBI&#8217; approval route) and<\/li>\n<li>Specific permission (&#8216;Government&#8217; approval route).<\/li>\n<li>There are some restrictions where specific permission is required, such as<\/li>\n<li>The parent entity is located in eight countries, including Pakistan and China, and so on.<\/li>\n<li>4 sensitive\u00a0sectors, i.e. defense, etc.<\/li>\n<li>NGOs and NPOs<\/li>\n<li>a sector in which 100% of FDIs are &#8216;not&#8217; permitted in India<\/li>\n<li>BOs\/LOs are \u2018not&#8217; permitted to carry out \u2018multiple&#8217; activities in India. The establishment of a domestic (subsidiary) company in India is therefore a solution to the &#8216;not&#8217; activities in India<\/li>\n<li>The establishment of a PO is permitted &#8220;after&#8221; the fulfillment of certain terms and conditions in India<\/li>\n<li>BOs\/POs are only permitted to buy immovable assets for critical purposes. Therefore, LOs are &#8216;not&#8217; allowed to buy India&#8217;s immovable assets. LO is, however, allowed to take on leases for a maximum duration of 5 years.<\/li>\n<li>Branch office&#8217;s \/LOs\/POs are required to close their establishment &#8216;after&#8217; meeting the certain terms and conditions&#8217;<\/li>\n<li>BOs\/LOs must submit Annual Activity Certificate (AAC) to the following offices on an annual basis.<\/li>\n<li>Designated AD Category- I Bank<\/li>\n<li>DGIT<\/li>\n<li>DGP<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>However, the Project office is not required to submit an Annual Activity Certificate (AAC).<\/p>\n<p><span style=\"color: #000080;\"><strong>You may also have a option of company formation or LLP formation in case you are looking for setting up business in India. Details about the comparative details about the both the option.\u00a0\u00a0<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-22621\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Company-formation-.jpg\" alt=\"Company formation or LLP Formation option \" width=\"818\" height=\"1156\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Company-formation-.jpg 716w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/02\/Company-formation--212x300.jpg 212w\" sizes=\"(max-width: 818px) 100vw, 818px\" \/><\/p>\n<p><iframe loading=\"lazy\" title=\"Project Office: Project Office \u0915\u094d\u092f\u093e \u0939\u094b\u0924\u093e \u0939\u0948? | Documents | Process | Project Office \u0938\u0902\u092a\u0942\u0930\u094d\u0923 \u091c\u093e\u0928\u0915\u093e\u0930\u0940\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/VLyK4Nmhb4g?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>How to Establish the Branch office (BO), Liaison office (LO) or Project office (PO) in India Eligible foreign Companies are permitted to the establishment of Liaison Office and Branch Office (Commonly known as Representative Office) and Project Office in India under the specific or general &#8216;approval&#8217; route by the RBI and Government of India. Eligible\u00a0Foreign &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[208],"tags":[9781],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10973"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=10973"}],"version-history":[{"count":4,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10973\/revisions"}],"predecessor-version":[{"id":22622,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/10973\/revisions\/22622"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=10973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=10973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=10973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}