No. A Liaison Office is prohibited from undertaking any trading, commercial, or industrial activity, directly or indirectly. Permitted activities include representing the parent company, promoting trade and collaborations, and acting as a communication channel.
Yes. A foreign entity can open a Liaison Office to understand and explore the Indian market before starting actual business operations.
No. The requirement is net worth of USD 50,000 as per the latest audited financials or at the application date. The "three-year" criterion applies to profitability, not net worth.
If the applicant is a subsidiary, a Letter of Comfort from the parent company (meeting the criteria) can be submitted to establish the Liaison Office.
LOs are initially valid for 3 years and must apply for renewal to continue operations.
No. A Branch Office must be registered under the Companies Act, 2013 as a foreign company. It cannot be structured as an LLP due to legal and regulatory differences.
No. While BOs are not allowed to engage in trading or manufacturing, they may import/export goods as part of service delivery (e.g., support services or technical support).
Yes. BOs can remit profits (net of taxes) earned in India to the parent company.
Yes. A BO does not have a fixed validity period under FEMA unless specified at the time of approval.
No. USD 100,000 net worth must be shown either as per latest audited financials or as of the application date. Profit for three preceding years is additionally required.
Only with RBI’s prior approval via AD Category I bank, justifying the need.
Yes, provided the bank account is redesignated as a BO account.
Yes, if it’s a single, time-bound project, PO is suitable. Branch Office is required for ongoing or multiple projects.
Funding may come from:
No. A PO closes upon project completion.
No. A PO is contract-based, with no financial eligibility criteria.
Yes. POs may remit profits (after tax) to the parent entity.
Yes, with a No Objection Certificate (NOC) from the designated AD Category I bank.
No. Since Multi-Brand Retail Trading allows only 51% FDI and involves FDI-linked performance conditions, only companies (not LLPs) can operate.
Yes. Once incorporated, the LLP is considered an Indian entity and must comply with LLP Act, 2008.
An Indian entity may invest overseas up to 400% of its net worth (as per last audited balance sheet). Investment including loans and non-fund-based commitment is calculated on overall basis but not on per financial year or per foreign entity basis.
There is no upper limit unless sector-specific caps apply. However, minimum capitalization norms may apply to specific sectors.
Yes. Indian companies may issue ESOPs to employees/directors of their foreign subsidiaries.
