Liaison Office Registration in India | Complete Guide
Liaison Office Registration in India - Eligibility, Process, and Documents
Liaison Office Registration enables a foreign company to establish a Liaison Office in India solely for carrying out liaison-related activities. These activities include acting as a communication channel between the foreign parent company and Indian businesses or regulatory authorities, conducting market research, promoting products or services in the Indian market, facilitating import and export operations, representing the parent company before Indian stakeholders, and fostering business collaborations.
It is important to note that a Liaison Office is strictly prohibited from undertaking any commercial, trading, or revenue-generating activities in India. All permitted activities must comply with the provisions of the Foreign Exchange Management Act (FEMA) and guidelines issued by the Reserve Bank of India (RBI).
At BizCatalyst Technologies, we assist foreign companies in setting up their Liaison Offices in India through a smooth and hassle-free process. Our expert team takes care of end-to-end requirements, including approvals from the RBI and registrations with the Registrar of Companies (ROC).
What is the Liaison Office?
A Liaison Office serves as a representative office of a foreign company in India and is established strictly for non-commercial purposes. Its primary role is to act as a communication channel between the foreign parent company and its Indian counterparts in both the public and private sectors, thereby facilitating coordination and collaboration.
A liaison office may also promote the products or services of the foreign parent company, assist in market research, and support import and export activities in India. Many foreign companies set up liaison offices to assess market potential and business opportunities in India before commencing full-scale operations through a branch office or an Indian subsidiary.
Since a liaison office is not permitted to undertake any revenue-generating or commercial activities, it is generally not subject to taxation in India. However, if it engages in any activity that goes beyond the scope of FEMA-permitted non-commercial functions, it may become liable to tax under the provisions of the Income Tax Act, 1961.
Eligibility for Liaison Office Registration in India
To establish a Liaison Office in India, a foreign company must satisfy the following eligibility conditions as prescribed under FEMA and RBI guidelines:
Minimum Net Worth
The foreign parent company must have a minimum net worth of USD 50,000, which should be clearly reflected in its latest audited financial statements.
Profitability Track Record
The applicant company must have a consistent profit-making record for the immediately preceding three financial years in its home country.
Name of the Liaison Office
The Liaison Office must operate under the same name as its foreign parent company. The proposed name should be unique and must not conflict with existing Indian companies, LLPs, or registered trademarks.
Registered Office in India
The Liaison Office must maintain a registered office address within Indian territory, which will be used for official correspondence and regulatory compliance.
Restriction to Non-Commercial Activities
A Liaison Office is strictly prohibited from undertaking any commercial or revenue-generating activities in India. It may only engage in activities permitted under FEMA, which include:
Representing the foreign parent company or group companies in India
Promoting exports from India or imports into India
Facilitating technical or financial collaborations between the parent/group companies and Indian entities
Acting as a communication and coordination channel between the foreign parent company and Indian businesses
Process of Liaison Office Registration in India
The process of Liaison Office Registration in India broadly involves two key stages. First, the foreign parent company must obtain approval from the Reserve Bank of India (RBI) or an Authorised Dealer (AD) Category–I Bank. Once approval is granted, the liaison office must be established within six months. Thereafter, within 30 days of establishment, the foreign company is required to register the liaison office with the Registrar of Companies (ROC) under the Companies Act, 2013.
Depending on the nature of the applicant and location of operations, additional registrations with State Police Authorities, the GST Department, or the DGFT may also be required. The detailed procedure is explained below.
Step 1: Legalisation and Attestation of Documents
Before filing the application for Liaison Office Registration in India, all documents must be prepared in the prescribed format. Since certain documents—such as the parent company’s certificate of incorporation, board resolution, banker’s report, and authorised signatory documents—originate outside India, they must be properly notarised, apostilled, or consularised, as applicable, before submission.
Step 2: Determining the Applicable FDI Approval Route
A liaison office functions as an extension of its foreign parent company and does not have a separate legal identity. All operational expenses are met through Foreign Direct Investment (FDI) received from the parent entity.
The RBI permits 100% FDI under the automatic route for most sectors. However, certain strategic or sensitive sectors are subject to government or RBI approval. Identifying the correct FDI route beforehand is crucial to ensure a smooth and timely approval process.
Step 3: Filing the Application with the AD Category–I Bank
If the proposed business activity falls under the automatic route, the liaison office can be established with the approval of the AD Category–I Bank, without requiring separate RBI approval.
The applicant company must file Form FNC, duly completed and digitally signed by the authorised signatory, along with the prescribed supporting documents.
Step 4: Seeking RBI Approval in Special Cases
In certain situations, the AD Bank forwards the application to the RBI for detailed scrutiny and approval. These include cases where:
The applicant is incorporated in or is a citizen of Pakistan
The applicant is incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau and proposes to open a liaison office in Jammu & Kashmir, the North-East region, or Andaman & Nicobar Islands
The principal business activity falls under Defence, Telecom, Private Security, or Information & Broadcasting
The applicant is a Non-Government Organisation (NGO), Non-Profit Organisation (NPO), or an entity associated with a foreign government
Step 5: Allotment of UIN and Issue of Approval Letter
Before issuing the approval letter, the RBI allots a Unique Identification Number (UIN) to the liaison office. Once the UIN is generated, the AD Bank issues the approval letter, which is valid for six months.
The foreign company must establish the liaison office within this validity period; failing which, the approval may be cancelled.
Step 6: Registration with State Police Authorities (If Applicable)
If the foreign company is incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau, it is required to register the liaison office with the concerned State Police Authorities. In such cases, the AD Category–I Bank forwards a copy of the approval letter to the Ministry of Home Affairs (MHA).
Step 7: Registration with the Registrar of Companies (ROC)
Within 30 days of setting up the liaison office, the foreign company must file Form FC-1 with the ROC to complete registration under the Companies Act, 2013.
The application must be submitted along with the RBI/AD Bank approval letter and other prescribed documents. All foreign-origin documents must be duly legalised at this stage.
Step 8: Obtaining PAN, TAN, and Opening a Bank Account
After successful ROC registration, the liaison office must apply for:
PAN (Permanent Account Number)
TAN (Tax Deduction and Collection Account Number)
Additionally, a dedicated bank account in India must be opened to receive inward remittances from the parent company. Depending on applicability, other registrations such as IEC and GST may also be required.
Documents Required for Liaison Office Registration in India
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To successfully complete the Liaison Office Registration process in India, a foreign company must submit a comprehensive set of documents at two stages—RBI/AD Bank approval and registration with the Registrar of Companies (ROC). The detailed document checklist is provided below.
Documents Required for RBI / AD Bank Approval
The following documents must be submitted to the Reserve Bank of India (RBI) or the Authorised Dealer (AD) Category-I Bank:
Certificate of Incorporation of the Parent Company
Memorandum of Association (MOA) and Articles of Association (AOA) of the Parent Company
Audited Financial Statements of the Parent Company for the last three financial years, evidencing the required net worth
Banker’s Report from the Parent Company’s bank in the country of origin
Board Resolution passed by the Parent Company approving the establishment of a Liaison Office in India
Letter of Comfort from the Holding Company (required only if the Parent Company does not meet the prescribed net worth criteria)
Documents Required for Liaison Office Registration with ROC
After obtaining RBI / AD Bank approval, the following documents must be filed for registration under the Companies Act, 2013:
RBI / AD Bank Approval Letter
Certificate of Incorporation of the Parent Company
Memorandum of Association (MOA) and Articles of Association (AOA)
List of Directors of the Parent Company
KYC details of shareholders holding more than 10% shareholding in the Parent Company
Proof of Registered Address of the Liaison Office in India (utility bill not older than 2 months)
Letter of Authorisation appointing the Authorised Signatory for the Liaison Office
Documents Required from the Authorised Signatory
Recent coloured passport-size photographs
Passport copy
Stamped Business Visa
National Identity Card issued in the country of origin
Address proof (bank statement, electricity bill, water bill, or telephone bill not older than 2 months)
Important Forms and Declarations
Form FNC (application for establishing a Liaison Office)
Declaration specifying the source and permitted limits of Foreign Direct Investment (FDI)
Declaration stating the nature of activities and location of the Liaison Office in India
Note on Document Legalisation and Attestation
All documents originating outside India must be legalised and attested before submission to Indian authorities. This process ensures their validity and acceptance in India.
The mode of legalisation depends on the country of origin of the Parent Company:
Commonwealth Countries: Documents may be notarised by a public notary in the country of origin
Hague Convention Countries: Documents must be apostilled by the designated Apostille Authority
Other Countries: Documents must be legalised by the Indian Embassy or Consulate in the country of origin
Once the documents arrive in India, they must also be attested locally, typically after entry on a valid business visa.
