A foreign entity can establish a liaison office in India if it has a profit-making track record during the immediately preceding three financial years in its home country and net worth of not less than USD 50,000 or its equivalent as per the latest audited balance sheet.
The parent company is required to obtain permission for establishing liaison office in India from the Reserve Bank of India (RBI). The application to seek approval from Reserve bank of India (RBI) should be submitted though an Authorised Dealer Category-I bank. The approval for establishment is granted for an initial period of 3 years.
It is required to have the same name as that of its parent company and is not considered as an entity separate from the parent company. Apart from registering itself with the Reserve Bank of India (RBI), it is also required to be registered with the Ministry of Corporate Affairs (MCA). Yes, a liaison office established in India is required to file Annual Activity Certificate with the Reserve Bank of India.
Activities that can be carried out by a liaison office
A liaison office can undertake the following activities:
- Act as a channel of communication between the parent company and the parties in India
- Collecting information
- Informing parent company about opportunities in the Indian market
- Providing information about the company and its products to the prospective Indian customers
A liaison office cannot carry out the following activities:
- Undertake any business activity in India
- Earn any income in India.
For more information on establishment of Liason Office in India, please write to us at firstname.lastname@example.org or submit a query.
To know more about incorporation of company in India, Read below