What are the Steps of Opening a Liaison Office in India?

Register your Liaison Office in India quickly and hassle-free with Numbro – complete the process online in just 3 simple steps.

We facilitate strong collaboration between parent companies abroad and business partners in India.

We facilitate strong collaboration between parent companies abroad and business partners in India.

We assist with obtaining the necessary approvals and ensure a smooth compliance process.

We assist with obtaining the necessary approvals and ensure a smooth compliance process.

We help obtain necessary approvals, prepare compliance charts as per applicable laws, monitor regulations, and report to the concerned authorities.

We help obtain necessary approvals, prepare compliance charts as per applicable laws, monitor regulations, and report to the concerned authorities.

Liaison Office for Exploring New Business Opportunities

Liaison Office (LO) in India

For foreign companies planning to explore business opportunities in India, setting up a Liaison Office (LO) is often the most effective option.

The main purpose of establishing an LO is to:

  • Explore and gather relevant market information
  • Facilitate exports and business communication
  • Create a local presence while maintaining global outlook
  • A Liaison Office is also called a Representative Office. It can only perform liaison activities, meaning it acts as a communication channel between the Head Office abroad and business parties in India.

Wholly Owned Subsidiary (WOS)

A Wholly Owned Subsidiary is a company incorporated in India that is 100% owned by the parent company.

It gives complete control to the foreign parent company

The parent company appoints the board of directors

The subsidiary can operate in the same industry or even in a completely different sector

This structure is suitable for foreign companies looking for a long-term business presence in India.

    FEMA Definition of Liaison Office:

    ‘Liaison Office’ means a place of business to act as a channel of communication between the principal place of business or Head Office or by whatever name called and entities in India but which does not undertake any commercial /trading/ industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel.

    FAQ's

    What is a Liaison Office?

    A Liaison Office is set up by a foreign company to undertake liaison activities in India. Setting up a Liaison Office in India helps companies to tap the existing business potential in India by gathering information about possible market opportunities and framing appropriate business strategies.

    It acts as a channel of communication between Head Office abroad and parties in India. In other words, a liaison office acts as a marketing channel to provide information about the foreign company and its products to the prospective customers in India.

    What are the permitted activities for a Liaison office in India?

    A person resident outside India or a foreign company abroad is permitted by the Reserve Bank of India to establish a liaison office in India. However, it may undertake or carry on only those business activities that are specified by the law. These activities are:

    • Acting as a marketing channel between the Head office abroad and parties in India.
    • Representing the foreign company (parent or Group Company) in India by providing information about the products to Indian customers.
    Who can set up a Liaison Office?

    A person resident outside India or a foreign company abroad is permitted by the Reserve Bank of India to establish a liaison office in India, provided it meets the following criterion:

    • Net worth equal to USD 50,000 or more., and
    • Profitable financial track record of the immediately preceding three years in the original country of registration.

    However, if a person resident outside India or a foreign company abroad are not financially sound and are subsidiaries of other companies, then, in that case, it may furnish a Letter of Comfort from the parent company. In such cases, the parent company has to satisfy the prescribed criterion for net worth and profit.

    In order to open a Liaison Office in India, the foreign company has to submit an application to a designated AD Category - I bank Subject to FEMA Regulations and guidelines issued by the Reserve Bank. What if a foreign company is not able to open the Liaison office after getting approval from RBI?

    In case where the foreign company is not able to open the Liaison office within 6 months from the date of approval letter due to reasons beyond its control, then the AD Category-I bank may consider granting an extension of time for a further period of 6 months for setting up the office with the prior approval of RBI.

    What are the annual compliances for a Liaison Office?

    As annual compliance, a Liaison Office is required to furnish an annual activity certificate to the AD Category-1 Bank, Directorate General of Income Tax, concerned Registrar of Companies and Director General of Police, on or before 30th September of every financial year.

    Disclaimer: We are a private consultancy firm providing advisory and application support services related to business registration and compliance. We are not a government agency and we do not issue or provide government documents or certificates.