Foreign Liaison Office Registration India

A Liaison Office is incorporated in the character of a representative office set up primarily to explore and realize the business and investment climate. A Liaison Office is not authorized to attempt any commercial / buying and selling / industrial exercise , directly or not directly, and is necessary to maintain itself from inward remittances acquired from parent company via standard consumer banking routes. Its role is restricted towards accumulating information regarding possible industry options and offering information regarding the organization and its items in order to potential Indian clients. It may encourage foreign trade / transfer from/to India as well as assist in techie / fiscal collaboration among parent company and companies within India.

The Liaison Office is permitted to undertake subsequent activities only:

1. Addressing the parent Company in India
2. Advertising export/ import from/ to India
3. Advertising specialised / economic partnerships among the parent companies and companies in India
4. Acting as a conversation route amongst the parent company and Indian companies

Any kind of foreign company planning to open a Liaison Office in India is required to attain prior approval from the RBI, the apex bank in India. Acceptance is usually granted for someone to three years and may be reconditioned on expiry thereof.

Viability of a Liaison Office

The Liaison Office normally works like a transmission route between the parent company overseas and its current or potential customers in India. The Liaison Office may also be set up to create business associates or collect industry intelligence to advertise the products or services of the foreign parent company. The Liaison Office can not take on any enterprise activity in India nor acquire virtually any income in India.

At any time of closure of the Liaison Office, RBI gives permission to repatriate the stabilize inside the Indian banking account to the parent company.

Since the Liaison Office is not permitted to generate any income, it must not constitute a taxable business in India. However, the Liaison Office would be required to hold back tax out of certain payments and therefore is expected to adhere to the requisite ?tax suppressing? requirements within the domestic tax law.

To be able to create a Liaison office, the parent company must apply to the Reserve Bank of India and is usually given permission within just 2 to 10 weeks.

Characteristics of any Liaison Office in India:

• It cannot carry out any sort of commercial procedures within India.
• It need to keep a QA22C account with the bank. It is a exclusive account that exclusively permits inflows coming from abroad.
• It can neither access, nor provide money
• Almost all costs associated with the office has to be achieved by means of inward remittances into the office coming from abroad (parent company) through the bank.
• It just isn't be subject to taxation in India

On the other hand, the office must report regular returns with the RBI. This kind of returns must include Audited Annual accounts as well as an activity statement for the year.

The subsequent documents are required for applying to RBI for creating the Liaison Office in India:

1. Form FNC 1 ? 3 Duplicates
2. Letter from the Principal official from the Parent Company to RBI
3. Letter of Authority from the Parent Company towards regional representative.
4. 2 copies of the English edition of the Memorandum and Articles of Association (Charter Documents) of the Parent Company attested from Indian Embassy/Notary Public in the country of registration.
5. The most recently released audited Balance Sheet of the Parent Company.