Liaison Office Setup India
A Liaison Office is a representative office of a foreign parent organisation setup in India to facilitate liaison of foreign parent with Indian Organisations. Liaison Office is a special organisation setup as a representative of Foreign Parent organisation established with the prior permission of the Reserve Bank of India (RBI). Liaison Office is allowed to undertake only liaison work in India and all transactions whether related to Sale/ Purchase/ Provision of any services and even receipts and payment of money is undertaken directly by the parent company. Liaison office is not authorized to undertake any type of commercial activity accept liaison.
A Liaison office is setup only for the purpose of representation and cannot undertake any commercial activity in India. Further, all the expenses for a Liaison Office is borne by the parent organisation.
A Liaison office is not liable to pay any Indian Taxes as it is not undertaking any commercial activity, but now is required to file annual return with Income Tax Department. Further, it is also required to file annual return with the Registrar of Companies (ROC) as well as Reserve Bank of India (RBI).
Branch Office Vs Liaison Office
The main difference between liaison office and branch office is as follows:
- Liaison Office are not required to pay Income Tax in India whereas branch office is subject to taxation laws in India
- Liaison Office cannot undertake any Trading / Commercial activity directly in India, whereas branch office is allowed to do trading / commercial activities as permitted by RBI
- Branch offices are also subject to Transfer Pricing (International Taxation) Regulation of Indian Income Tax
Liaison Office Registration Procedure
For Liaison Office Setup in India, approval from Reserve Bank of India is required. After approval from RBI is received, further the company is required to be registered with Registrar of Companies (ROC) which completes the Liaison Office Setup process. See here more detailed information on Liaison Office Setup in India.
Requirements for Liaison Office Setup in India
The following are the documents required for Liaison Office Setup in India.
- 2 Copies of Certificate of Incorporation / Registration (notarised and attested by Indian Embassy) (One copy each for RBI & ROC). If it is in language other than english then Translation of the same notarised and attested by Indian Embassy is required.
- 2 Copies of Memorandum & Articles of Association (English Translation) notarised and attested by Indian Embassy
- Details of Last Three Years Import Into / Export From India (On letter head, signed with stamp, five copies)
- Latest 3 years Audited Balance Sheet (English translation) notarised / attested by Indian Embassy
- Existing arrangements, if any in India eg direct / indirect agent
- Details of existing Indian Clients, if any
- Details of activities to be undertaken in India
- Details of products / services to be rendered in India by parent company. Also, provide some literature like brochures / catalogs of products and literature on the company, if any. Indian regulators (RBI) love these literature and it helps in getting process completed speedily
- Some other Forms, documents may be required with signature which we would provide to you.
- Activities to be undertaken in India in case of Branch office.
AVA help foreign parent organisation with Liaison Office Setup in India in the shortest possible time frame. For more about our Liaison Office Setup Services Contact Us