Establishing a Liaison, Branch, or Project Office

Establishing a Liaison, Branch, or Project Office

Looking to establish your business presence in India without incorporating a full-fledged entity? Setting up a liaison office in India, branch office in India, or project office in India offers foreign companies a strategic and compliant route to explore, operate, or execute contracts in the Indian market under FEMA regulations.

1. Setting up a Liaison Office in India

A liaison office in India allows foreign companies to maintain a non-commercial presence while assessing the Indian market.

It acts purely as a communication channel between the foreign parent company and Indian businesses, without engaging in any trading, commercial, or manufacturing activity. Additionally, a Liaison office provides tax optimisation. 

Permitted Activities:

  • Representing the parent or group company(ies) in India
  • Promoting trade and business opportunities
  • Facilitating technical or financial collaborations
  • Acting as a communication channel with different Indian stakeholders.

 

Eligibility Criteria:

  • Profit-making track record in the immediately preceding 3 financial years
  • Minimum net worth of USD 50,000 (or equivalent)
  • Subsidiaries may provide a Letter of Comfort from the parent company that meets the criteria.

 

Validity:
The approval is generally valid for 3 years. Upon expiry, the liaison office in India may apply for renewal or convert into a Joint Venture or Wholly Owned Subsidiary, subject to applicable approvals.

2. Setting up a Branch Office in India

A branch office in India is ideal for foreign companies wishing to provide support services, or activities.

Unlike a liaison office, it is permitted to generate income through the activities approved by the RBI.

While it enjoys a leaner compliance framework compared to incorporated entities, a branch office in India is taxed at 35% on profits earned from Indian operations.

Permitted Activities:

  • Import and export of goods
  • Professional and consultancy services
  • Research and development aligned with parent’s business
  • Promoting technical and financial collaborations
  • Acting as a buying/selling agent
  • IT and software development services
  • Technical support services
  • Representation of a foreign airline or shipping company

Eligibility Criteria:

  • Profit-making track record in the immediately preceding 5 financial years
  • Minimum net worth of USD 100,000 (or equivalent)
  • Subsidiaries may submit a Letter of Comfort from the parent company

Validity:

No fixed validity period under FEMA unless specifically stated during approval. A branch office in India can operate indefinitely if it adheres to permitted activities and ongoing compliance requirements.

Profit Remittance:

Profits, net of applicable Indian taxes, may be freely repatriated to the parent company.

3. Setting up a Project Office in India

A project office in India is the most suitable structure for a foreign company executing a specific project in India, usually under a contract awarded by an Indian entity.

 It is a temporary setup dedicated to completing the contract.

Key Features:

  • No minimum net worth or profitability requirements
  • Must be backed by a valid project contract from an Indian company
  • Project funding must be through routes permitted under FEMA 
  • Site offices are allowed as part of the execution

 

Tenure:
The project office in India remains operational only until the completion of the specific project.

Profit Remittance:
Profits, after paying applicable Indian taxes, may be remitted to the foreign parent company.

Why Choose Femabide Advisorz?

FEMA & RBI Experts

Seamless setup of your liaison, branch, or project office in India with full compliance.

Strategic Guidance

We help you choose the right entry route for your business goals.

Quick Approvals

Fast-tracked coordination with Authorised Dealer Banks and regulators.

Ongoing Support

From filings to remittances, we handle it all post setup.

Trusted by Global Clients

Proven experience in helping businesses expand into India.

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Ready to expand your business into India?

Let us help you set up a liaison office in India, branch office in India, or project office in India with full legal and regulatory clarity. Contact us today to begin your journey in one of the world’s most dynamic markets.