Setting Up a Liaison Office in India
Updated on Friday 23rd February 2018
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One of the legal manners for starting a company in India is by establishing a liaison office. A liaison office, also known as a representative office, can only enter specific activities and it can’t start any commercial operations. Although this business structure does not fall under the regulations for commercial companies, similar incorporation steps have to be followed – such as setting up a corporate bank account at a local bank. Our team of consultants in company registration in India can assist foreign investors with information on the documents that have to be filed with local authorities when setting up a liaison office in an Indian city.
Regulations on liaison offices in India
The registration of a liaison office in India is defined under the Foreign Exchange Management Act (FEMA). According to the provisions of the Act, a liaison office can be seen as channel of communication between the headquarters of a foreign company and the legal or institutional entities operating in India.
The Act also states that the liaison office can’t operate in the following activities:
• commercial activities;
• trading activities;
• industrial activities.
Businessmen interested in the procedure of company formation in India should know that the liaison office has to be registered with the Reserve Bank of India (RBI) and obtain an approval from this institution to operate on the Indian territory. Our representatives can assist investors with more details on the registration with the RBI.
Activities of an Indian liaison office
In order to open a company in India registered as a liaison office, foreign investors may enter only the following activities:
• represent the interests of the foreign company on the Indian market;
• promoting import - export activities between entities in India and the country where the company is registered;
• promoting technical or financial collaborations;
• facilitate the communication between the foreign company and the Indian parties.
As a general rule, it takes approximately 20 to 24 weeks to register a liaison office, which may operate on the local market for a period of three years. However, if necessary, the investors may apply for an extension.
Foreign businessmen are invited to contact our team of specialists in company formation in India for more details regarding the registration of a liaison office.