Liaison office setup
 
A Liaison Office is in the nature of a representative office set up primarily to explore and understand the business and investment climate. A Liaison office setup is not permitted to undertake any commercial / trading / industrial activity, directly or indirectly, and is required to maintain itself out of inward remittances received from parent company through normal banking channels. The Liaison office setup is permitted to undertake following activities only:
  • Representing the parent Company in India
  • Promoting export/ import from/ to India
  • Promoting technical / financial collaborations between the parent companies and companies in India
  • Acting as a communication channel between the parent company and Indian companies
  • Any foreign company intending to open a Liaison Office in India is required to obtain prior approval from the RBI, the apex bank in India. Approval is usually granted for one to three years and can be renewed on expiry thereof.

Branch office setup in India

Foreign companies engaged in manufacturing and trading activities abroad are allowed to lay down Branch office setup in India for the following purposes:

Export/Import of goods
Rendering professional or consultancy services
Carrying out research work, in which the parent company is engaged.
Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
Representing the parent company in India and acting as buying/selling agents in India.
Rendering services in Information Technology and development of software in India.
Rendering technical support to the products supplied by the parent/ group companies.
Foreign airline/shipping company
Foreign Banks

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Office setups established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

 
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