Liaison Office Registration Easy & Online Process

A foreign company can register a Liaison Office for representation or marketing research by obtaining permission from the Reserve Bank of India (RBI) and registering it with the Registrar of Companies.

Liaison Office Registration

A Liaison Office (LO) functions as a place in India that represents a foreign company, primarily to understand and explore the general business environment, conduct market research for the products of the parent company, and provide and seek information from potential customers or vendors. A liaison office can be set up for representing the parent company or group companies in India, promoting export or import from or to India, promoting technical or financial collaborations between parent or group companies and companies in India, and acting as a communication channel between the parent company and Indian companies. A liaison office of the foreign company cannot engage in any commercial activities, and the parent company shall meet all its expenses. However, if it generates any income by conducting activities that constitute a business connection with the parent company, such income will be taxed under the Income Tax Act of 1961. Since a liaison office is not considered a separate entity from its parent foreign company, the taxes imposed are the same as those on a foreign company. As of now, the tax on the profit of the foreign company is charged at a rate of 40% of the total income generated.

Process for Liaison office Registration in India

  • 2024

  • STEP 1 – Application for Digital Signature of Authorised Signatory

    The process of Liaison Office registration begins with application for Digital Signature Certificate. A digital signature is the equivalent of physical signature under the Information Technology Act. As per new guidelines, all applications to the Registrar of Companies are filed in digital format and are therefore required to be authenticated using a digital signature of the authorized signatory. To obtain a Digital Signature, the concerned signatory will have to file an application to a Certified Agency, with the prescribed documents and application fees. You can avail our services to apply for a DSC in India.

  • STEP 2 – Filing Application for AD Bank’s approval

    After the authorized representative or signatory has obtained a Digital Signature Certificate, the next step is to seek approval for opening a liaison office. For opening a liaison office, approval can be sought from the AD Category-I Bank itself if 100% FDI is allowed in the sector to which it belongs. For this, the concerned foreign company will have to submit Form-FNC to the AD Category-I Bank (AD). We are networked with many banks in India, which operate as an AD Category-I Bank for foreign companies. Contact us, (direct to the form) if you need our assistance.

  • STEP 3 – Verification of KYC from Banker of Parent Company

    After the FNC Form is filed with the AD Bank, it sends a request for verification of documents filed with the form to the banker of the foreign company in its country of origin. This process is also known as swift-based verification. Only after the documents are verified by the banker, the AD bank will be able to grant approval for setting up a liaison office.

  • 2024

  • STEP 4 – Approval of RBI for Liaison Office Registration in India

    Once the AD Bank or the RBI grants permission to establish the Branch Office, the next step is to register it with the Registrar of Companies (ROC) within 30 days of the approval. The application to ROC is filed in form FC-1 along with the foreign company’s documents and the RBI’s permission.

  • STEP 5 – Other Registrations and Licences

    As mentioned before, liaison offices can be set up in India, usually with the approval of AD Bank itself if 100% FDI is allowed in the sector. However, approval from RBI will be required if 100% FDI is not allowed in the sector, if the applicant is involved in sectors like telecom, defense, private security, or information and broadcasting, if the applicant entity is an NGO/NPO, or if the applicant entity belongs to countries like Pakistan, Afghanistan, Iran, China, Bangladesh, Sri Lanka, Hong Kong, or Macau, or any foreign entity which wants to open a branch in the North-east Indian States, Jammu and Kashmir, or Andaman & Nicobar islands. In such circumstances, the AD bank will further the FNC application to the RBI after the documents have been verified by the foreign banker. It usually takes a week for the RBI to process the application and grant approval.

What are the Annual Compliances of Liaison Office in India?

Filing Annual Returns to ROC

Annual Returns have to be filed by the concerned Liaison Office within 60 days from the date on which the financial year ends, or before the 31st of May every financial year, for the previous financial year.

Filing Annual Activity Certificate to ROC

Annual Activity Certificate is a Certificate issued by a practicing CA, where he declares that the activities carried out by the liaison office in the concerned Financial Year were permitted by the RBI. The Certificate will have to be filed to the concerned AD Category-I Bank on or before the 30th of September every financial year.

Filing Annual Financial Statements

Annual Financial Statements will have to be filed within 6 months from the date of closing of the Financial Year. These must be audited by a practicing Chartered Accountant.