#Liaison-Office


A foreign company can set up a Liaison office in India. A Liaison Office is also known as Representative Office. It can undertake only liaison activities, which is to act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India.
Registration of a liaison office requires that it meets certain conditions and can undertake the following activities in India:

  • Representing in India the parent company / group companies.
  • Promoting export / import from / to India.
  • Promoting technical/financial collaborations between parent/group companies and companies in India.
  • Acting as a communication channel between the parent company and Indian companies.

Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office outside India. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian customers.

Permission to set up such offices is initially granted for a period of 3 years and this may be extended from time to time by an AD Category I bank.


The RBI has a few other considerations:

  • Track Record: For a Liaison office, the parent company will require a profit making track record in the in the immediately preceding three financial years in the home country.
  • Net Worth: “a total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement Certified by a Certified Public Accountant or any Registered Accounts Practitioner”. The net worth has to be equal to or more than USD 50,000.
  • Proprietary firm: set up abroad are not allowed to establish Liaison Offices in India.

Reporting Requirements:

All new Liaison offices set up must submit a report containing certain information within 5 working days of the Liaison Office becoming functional to the Director General of Police (DGP) of the state concerned in which Liaison Office has established its office.

Liaison Offices have to file Annual Activity Certificates (AAC) from a chartered accountant at the end of March 31, along with the audited Balance Sheet on or before September 30 of that year.

Documents Required for setting up a Liason office:

  • Form FNC – Three copies.
  • Letter from the principal officer of the Parent company to RBI.
  • Letter of authority from the parent company in favor of Local Representative.
  • Letter of authority/ Resolution from parent company for setting up LIAISON office in India.
  • Comfort letter from the parent company intending to support the operation in India.
  • Two copies of the English version of the Certificate of Incorporation, Memorandum & Articles of association (Charter Document) of the parent company duly attested by the Indian embassy or notary public in the country of registration. Certification of Incorporation – Translated & Duly Notarized and Certified by Indian Consulate.
  • The Latest audited Balance sheet and annual accounts of parent company duly Translated notarized for past Three years. & Certified by Indian Consulate & Directors.
  • Name, Address, email ID and telephone number of the authorized person in Home Country.
  • Details of Bankers of the Organization the Country of Origin along with the bank account number.
  • Commitment from the Organization to the effect that it will be open to report / opinion sought from its banker by the Government of India / Reserve Bank of India.
  • Expected funding level for operations in India.
  • Details Relating to address of the proposed local office, number of persons likely to be employed, number of Foreigners among such employees and address of the head of the Local office, if decided.
  • Details of Activity carried out in Home Country by the applicant organization in brief about the product and services of company in Brief.
  • Bankers Certificate.
  • Latest Proof of identity of all the Directors – Certified by Consulate and Banker in Home Country.
  • Latest Proof of address all of Directors – Certified by Consulate and Banker in Home Country.
  • Details of the Individuals / Company holding more 10% of Equity.
  • Structure of the Organization w.r.t Shareholding pattern.
  • Complete KYC of Shareholders holding more than 10% Equity in the Applicant Company.
  • Resolution for Opening up Bank Account with the Banker.
  • Duly Signed Bank Account Opening Form for Indian Bank.

Post Incorporation Licenses:

After the company is registered, it may have to get certain licenses deepening on the nature and size of business. Here are the list of licenses which is required if a company is registered in Bangalore, Karnataka.

  1. Karnataka Shops and commercial establishment - All companies registered must get this license from the department of labour.
  2. Professional Tax enrolment - All companies registered must get this license from the department of professional tax.
  3. Employee Professional Tax - (required only when salary payable is more than Rs 15,000 per month to employees).
  4. Import Export License - (Required if you are importing or exporting).
  5. GST - Rs 3,000 (Required if Company si into export of goods or service, turnover is more than Rs 20 lakhs per year ).

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