Overview
A Foreign Company that wishes to have a presence in India without incorporating a subsidiary can establish a place of business such as a branch office, liaison office, or project office. These are governed by the foreign company provisions of the Companies Act, 2013 and, being exchange control matters, require approval or acknowledgement from the Reserve Bank of India through an authorised dealer bank under FEMA. On setting up a place of business, the foreign company must register the establishment with the Registrar of Companies by filing the prescribed forms. Each type of office has a defined scope of permitted activities.
Objective
To help a foreign company establish and register a branch, liaison, or project office as a place of business in India under the Companies Act, 2013 and FEMA.
Characteristics
- A presence in India without forming a separate Indian company
- Set up as a branch office, liaison office, or project office
- Each office type has a defined and limited scope of activity
- Requires RBI route approval or acknowledgement through an authorised dealer bank
- Registration with the Registrar of Companies through the prescribed forms
Eligibility
- A company incorporated outside India seeking a place of business in India
- A track record and financial position meeting the RBI criteria for the office type
- Activities falling within those permitted for the chosen office type
- Approval or acknowledgement under the applicable FEMA route
- An authorised representative resident in India
Governing law
- Companies Act, 2013 (foreign company provisions, Sections 379 to 393)
- Foreign Exchange Management Act, 1999 (FEMA)
- Reserve Bank of India (RBI)
- Registrar of Companies (ROC)
The process
- 1Select the office type
The foreign company decides between a branch office, liaison office, or project office based on the activities it intends to carry on in India.
- 2Obtain RBI route approval or acknowledgement
An application is made through an authorised dealer bank under FEMA to obtain approval or acknowledgement to establish the office in India.
- 3Register the establishment with the ROC
Within the prescribed period of establishing the place of business, the foreign company files the required forms and documents with the Registrar of Companies.
- 4Complete tax and operational registrations
The office obtains PAN, TAN, and other applicable registrations and complies with ongoing filing and reporting requirements in India.
Documents required
- Certificate of incorporation and charter documents of the foreign company, apostilled or notarised
- Audited financial statements of the foreign company
- Board resolution authorising the office in India
- Details and identity proof of the authorised representative in India
- Proof of the office address in India
- Approval or acknowledgement letter from the authorised dealer bank or RBI
Benefits
- A presence in India without incorporating a subsidiary
- Ability to carry on activities permitted for the chosen office type
- Direct link to the foreign parent's operations and brand
- A structured route to test or serve the Indian market
- Compliance with a clear regulatory framework under the Companies Act and FEMA
Frequently asked questions
What is the difference between a liaison office and a branch office?
A liaison office can only act as a communication channel between the foreign company and Indian parties and cannot carry on commercial or income earning activity in India. A branch office can carry on specified activities such as export, import, and rendering professional or consultancy services, within the scope permitted by the Reserve Bank of India.
Does a foreign company need to register with the Registrar of Companies?
Yes, once a foreign company establishes a place of business in India it must register the establishment with the Registrar of Companies by filing the prescribed forms within the timeline set under the Companies Act, 2013. This is in addition to obtaining the necessary approval or acknowledgement under FEMA.