Liaison Office Registration
Register Liaison Office in India to works as a place which is used to typify foreign company principally with the purpose to explore and understand the business specifications, environment of business, knowing nature of the business market and carrying market research for the company’s product in order to understand the demand for the product and look for further information from the view of customers or vendors. Conduct Liaison Office Registration online with Ritedger to have a hassle-free registration.
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Liaison Office Registration - Overview
Checklist to consider before registering Liaison office in India
- No Income Giving Activity : The parent company offers financial help to all the liaison office operations as it is not allowed to gain any income in India.
- Net Worth Requirement : It is mandatory for a parent entity to have a beneficial track record of the preceding three years back to back and they should also own net worth of exceeding $50,000 manifested by their auditors.
- Taxation In India : Income tax authorities can impose income tax on a liaison office of the parent company.
- Name & New Office : The name must be the same as that of the parent company, and for each and every new liaison office, a new approval is required from the RBI or Reserve Bank of India with complete authorization.
Qualification criteria for Liaison Office Registration in India
Foreign Exchange Management Regulations, 2016 controls the formation of the place of business for a foreign parent company. It is necessary to come under the criteria of below- mentioned eligibility in order to start a liaison office in India:
- Income-generating activity is forbidden
- It is mandatory for the foreign parent office to own net worth that exceeds $50,000
- Beneficial track statement or report of the preceding three years of the applicant company is necessary
Activities that can be done in a Liaison Office
- Provides healthy communication between the foreign parent company and the dealers or business parties in India with the aim to create market and business opportunities
- Encourages healthy export and import relationship between parties from different countries
- Forms a technical and financial collaboration between overseas and Indian entities
- Represents the foreign head company in India
- Since India is a place which has rapidly growing and progressing economies of the world and also has many multinational entities interested to invest in the Indian business market and always expecting to establish their liaison office in and around India.
- Memorandum of Association
- Article of Association
- Complete details of Directors
- Complete details of shareholders of the applicant company
- Net worth certificate attested by Certified Public Accountant (CPA)
- Audited financial statement of the last three years
- Applicant’s banker’s report
List Of Documents For Liaison Office Registration
Documents needed from Parent Company
- COI or Certificate of Incorporation or Registration of Foreign Parent Company
- MOA and AOA
- Complete list of Directors
- Complete list of shareholders or members of the applicant company
- Net worth certificate manifested by CPA or Certified Public Accountant
- Audited financial report or statement of the preceding three years
- Applicant’s banker’s statement
Documents needed from the Authorized Signatory
- 5 Passport size photographs
- 5 passport copies
- Business visa along with immigration stamp of arrival
- 5 copies of the proofs of national identity card
- Address Proof such as Bank Statement or Electricity or Water Bill or Phone Bill
- Power of attorney in the AR’s name
- Board resolution while charging the AR
Drafting of Government Forms and Documents
On collecting the complete set of required documents the next step is to draft the documents mentioned below for the signature purpose by the company and from the authorized officer.
- Approval from the Board Resolution of the company for setting up the liaison office in India.
- A resolution from the applicant stating the FDI eligibility and source of fund
- A resolution explaining the nature of the business activity, location of the business activity of suggested Liaison office
- A resolution stating the nature of the business activity and the location of business activity of the suggested Liaison office
- Form FNC
- A formal letter from holding company stating comfort
The Registration Process Liaison Office in India
Applying For Digital Signature Of Authorized Signatory
- As per the information technology act, a digital signature certificate or DSC is equally valued as a normal signature. And it has been made a mandatory step to file all applications in digital format to the registrar of companies. The registration process of the application is approved through the digital signature certificate of the proposed directors and shareholders.
Filling Of Application With RBI Via AD Bank
- The application for starting a Liaison office of a foreign company is filed in FNC. The application is submitted to the Reserve Bank of India through AD Bank (Authorized Dealer). The AD bank has a crucial role as all the communication with the RBI is dispelled via them.
Verification Of KYC From Banker Of Foreign Company
- A request concerning the scrutiny of documents is submitted to the foreign company’s banker. This process is also called swift based verification (sending requests for the purpose of verification). Once the documents are verified from the foreign banker the application is submitted to the Reserve Bank of India for the purpose of approval The RBI can also have the right to ask for the documents if needed.
Approval Of Reserve Bank Of India For Liaison Office Registration In India
- A particular agenda or policy is followed in the approval process of the liaison office in India by the AD Banker. Priority is afforded to the applicants where an automatic route is not available.
Registration Of Liaison Office With ROC
- Once the company is organized a bank account is opened in an authorized bank wherein the FDI should reach within 3 months or 180 days of organizing the company with the advance announcement to concerned Banker.
Tax Deduction Number, PAN Card, And Opening A Bank Account
- The Income Tax department of India grants a unique 10 digit number, named as PAN number. And after getting the PAN number, the liaison office is now eligible to open a bank account in the company name. And it is mandatory for every taxpayer to obtain a Tax Deduction Account Number to follow all the TDS norms and conditions.
GST Registration And Import Export Code
- Once the Bank Account and cheque book is obtained, the Liaison office needs arise for a copy of the cheque for making an application for Import Export Code and GST registration.
Frequently Asked Questions
A liaison office of a foreign organization is allowed to do just limited movement in India, provided none of the activities is benefit making action. As such, a liaison office can do statistical surveying and so on.
A Liaison office acts as a place in India which presents foreign company primarily with the need to understand and explore the environment of business, the business conditions, understanding or agreement nature of the market and carrying on market research for the product of the organization in order to look and to provide for further information from future customers or vendors.
The Reserve Bank of India approves the setting up of a liaison office in India. A particular agenda or policy is followed in the approval process of the liaison office in India by the AD Banker. Priority is afforded to the applicants where an automatic route is not available.
- Income-generating activity is forbidden
- It is mandatory for the foreign parent office to own net worth that exceeds $50,000
- Beneficial track statement or report of the preceding three years of the applicant company is necessary
On collecting the complete set of required documents the next step is to draft the documents mentioned below for the signature purpose by the company and from the authorised officer.
- Approval from the Board Resolution of the company for setting up the liaison office in India.
- A resolution from the applicant stating the FDI eligibility and source of fund
- A resolution explaining the nature of the business activity, location of the business activity of suggested Liaison office
- A resolution stating the nature of the business activity and the location of business activity of the suggested Liaison office
- Form FNC
- A formal letter from holding company stating comfort
The application for Digital Signature Certificate (DSC) for such companies is filed through the online portal, and the shareholders and directors of the company should sign it. The issuing of DSC needs some mandatory documents like address proof, identity proof associated with some photographs.
A request concerning the scrutiny of documents is submitted to the foreign company’s banker. This process is also called swift based verification (sending requests for the purpose of verification)
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