Which office does your company need?
Pick the office by what it will do in India. If it must sell, invoice or earn, a liaison office is not enough.
These offices are governed by the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016 (FEMA 22(R)/2016-RB) and the RBI's Master Direction on the subject. None of them is a separate company: the foreign parent is the legal entity and carries the liability.
| Point | Liaison office (LO) | Branch office (BO) | Project office (PO) |
|---|---|---|---|
| Purpose | Represent the parent and act as a communication channel | Carry on the parent's business in permitted activities | Execute a specific project or contract in India |
| Income in India | None: expenses met by remittances from the head office | Yes | Yes, from the project |
| Validity of approval | 3 years (2 years for NBFCs and construction and development entities), extendable | Not time-bound in the same way | For the tenure of the project |
| Typical user | A foreign manufacturer exploring the market or sourcing | A consulting, IT, trading or research business serving Indian clients | A foreign contractor that has won an Indian contract |
Planning to sell broadly, hire at scale or manufacture? Compare an Indian subsidiary first.
Eligibility: track record and net worth
A branch office needs a profit-making track record in the immediately preceding five financial years in the home country and a net worth of at least US$100,000 or its equivalent. A liaison office needs a profit-making track record in the immediately preceding three financial years and a net worth of at least US$50,000.
Net worth means paid-up capital plus free reserves, less intangible assets, as shown in the latest audited balance sheet or account statement certified by a public accountant.
If the applicant does not qualify. A subsidiary of another company that does not meet the criteria can apply on the strength of its parent or group company, with a letter of comfort in which the parent undertakes to provide financial support and meet any liability of the Indian office. The parent must itself meet the track record and net worth tests.
A project office has no track record or net worth test. It needs a contract from an Indian company to execute a project in India, the regulatory clearances for that project, and funding by inward remittance from abroad or by a bilateral or multilateral international financing agency, among the conditions set out in the Master Direction.
What each office may do
Each office may carry on only the activities allowed for it. Activities outside the list need separate approval, or a subsidiary.
Liaison office. It may represent the parent or group companies in India, promote export and import from and to India, promote technical or financial collaboration between the parent and Indian companies, and act as a communication channel between the parent and Indian companies. It cannot undertake any commercial, trading or industrial activity. Its expenses are met only from remittances received from the head office through its bank account in India.
Branch office. It may export and import goods; render professional or consultancy services; carry out research work in the parent's field of business; promote technical or financial collaboration between Indian companies and the parent; represent the parent in India and act as its buying or selling agent; render information technology services and develop software in India; provide technical support for products supplied by the parent or group companies; and act as a representative office for a foreign airline or shipping company. A branch in a Special Economic Zone has general permission where it works in a sector with 100% FDI, complies with Chapter XXII of the Companies Act, 2013 and functions on a stand-alone basis.
Project office. It may carry on only the activities needed to execute the project it was set up for, and closes once the project is complete.
Who approves: your AD bank or the RBI
You apply in Form FNC to a designated AD Category-I bank in India, and in most cases the bank grants the approval itself after due diligence. The RBI then allots a Unique Identification Number (UIN) to the office.
The bank forwards the application to the RBI, which decides in consultation with the Government of India, where:
- the applicant is a citizen of, or registered or incorporated in, Pakistan
- the applicant is a citizen of, or registered or incorporated in, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau, and the office is proposed in Jammu and Kashmir, the North East region or the Andaman and Nicobar Islands
- the principal business falls in defence, telecom, private security, or information and broadcasting, unless the required government approval has already been obtained
- the applicant is an NGO, a non-profit organisation, or a body or agency of a foreign government
Applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau or Pakistan must also register with the state police authorities. The approval lapses if the office is not opened within six months of the approval letter, so plan premises and staff before you apply.
The registration process
The process runs through your bank first and the ROC second.
| Step | What happens | Deadline or note |
|---|---|---|
| 1. Eligibility review | Track record, net worth, activities and approval category checked | Decide LO, BO or PO |
| 2. Documents | Parent's documents notarised and apostilled or consularised; audited accounts; board resolution | Arrange early |
| 3. Form FNC | Application filed with the designated AD Category-I bank | Bank grants approval, or forwards to the RBI for listed categories |
| 4. Approval and UIN | Approval letter from the AD bank; UIN allotted by the RBI | Office must open within six months |
| 5. Police registration | Only for applicants from the countries listed above | As required by the state police |
| 6. FC-1 with the ROC | Registration as a foreign company with a place of business in India | Within 30 days of establishing the place of business |
| 7. PAN, TAN and bank account | PAN and TAN for the office; account with the AD bank | Before payments start |
| 8. GST and other registrations | GST registration for a branch or project office that makes taxable supplies; IEC for import or export | As the activity requires |
Documents you need
The documents come mostly from the parent company, executed abroad and legalised for use in India.
| Document | Note |
|---|---|
| Certificate of incorporation and charter documents of the parent | Notarised and apostilled, or consularised |
| Latest audited financial statements for the track record period | For LO: three years; for BO: five years |
| Board resolution of the parent to open the office | Names the authorised representative in India |
| Letter of comfort from the parent or group company | Only where the applicant relies on its parent's financials |
| Details of the proposed activities and premises in India | Must match the permitted activities |
| Identity and address documents of the authorised representative | Resident in India |
| List of directors and secretary of the foreign company, and the principal officer in India | Needed again for FC-1 |
Fees for setting up an office in India
We quote after the eligibility review, because the work depends on the office type, the approval route and the number of documents to legalise.
| Fee | Amount |
|---|---|
| Professional fee (Regikart) | On quote, in writing before we start |
| Form FNC to the AD bank and RBI approval | No government fee under the FEMA regulations; any charges by your bank are the bank's own |
| FC-1 with the ROC | MCA filing fee as prescribed under the Companies (Registration Offices and Fees) Rules, 2014; quoted before filing |
| PAN / TAN | Applied for separately for the office; charges quoted with the application |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
Notary, apostille and courier charges in the parent's country are paid there and are not included.
Compliance every year
An office of a foreign company reports to its AD bank, the income-tax department and the ROC every year.
| Filing | Who | Due |
|---|---|---|
| Annual Activity Certificate (AAC), with the audited balance sheet | LO and BO: to the AD bank and the Director General of Income Tax (International Taxation), New Delhi. PO: to the AD bank | For the year ending 31 March, by 30 September |
| FC-3 (annual accounts of the Indian business) | All offices | Within six months of the close of the financial year |
| FC-4 (annual return) | All offices | Within 60 days of the last day of the financial year |
| Audit of the Indian business accounts | All offices | By a practising chartered accountant or CA firm in India |
| Form 49C (statement of activities) | Liaison offices | For FY 2025-26, under section 285 of the Income-tax Act, 1961: within 60 days of the year end |
| Income-tax return | Branch and project offices, and any office with taxable income | Annual; from Tax Year 2026-27 under the Income-tax Act, 2025 |
| FC-2 (changes in documents, directors or principal place of business) | All offices | Within 30 days of the change |
| Annual report to the state police | Applicants from the listed countries | Annually |
The AAC is certified by a chartered accountant and confirms that the office has carried on only the activities it was permitted. A liaison office that wants to continue beyond its validity applies for an extension through the AD bank before expiry.
How the office is taxed
A branch or project office is part of the foreign company, so its Indian profits are taxed at the foreign company rate.
- FY 2025-26 (AY 2026-27), Income-tax Act, 1961: a foreign company pays tax at 35%, plus a surcharge of 2% where income is above ₹1 crore up to ₹10 crore and 5% above ₹10 crore, and health and education cess at 4%.
- Tax Year 2026-27 onwards: the Income-tax Act, 2025 applies.
A liaison office is not meant to earn income in India, but it still files Form 49C and keeps accounts. If its activities go beyond the permitted list, the tax department may treat it as a permanent establishment of the foreign company. Payments to the head office may need Form 15CA and 15CB, and the office deducts TDS on its own payments like any other deductor (see TDS filing).
When a subsidiary is the better choice
Choose an Indian subsidiary if you want to earn revenue across a wide range of activities, manufacture, or keep Indian liabilities away from the parent.
- A subsidiary is a separate Indian company; an office exposes the parent directly.
- A subsidiary is taxed at domestic company rates; a branch pays the foreign company rate.
- A subsidiary needs no parent track record; a branch needs five profitable years and a liaison office three.
- A subsidiary can do anything the FDI rules allow; an office is limited to its permitted list.
The RBI Master Direction expects a liaison office of an NBFC or a construction and development entity to close or convert into a joint venture or wholly owned subsidiary when its validity ends, so plan the long-term structure at the start.
How we work with foreign companies
Regikart is a CA and CS firm with 250+ clients. Office registrations are led by our foreign investment team and reviewed by CA Ganpat Khemka.
- Eligibility first. You know whether the parent qualifies, and on which route, before any document is legalised.
- Bank and ROC in one place. Form FNC pack, FC-1, PAN and TAN, and the annual AAC, FC-3, FC-4 and Form 49C.
- Accounting and audit support for the Indian office through our accounting service and payroll services.
- Offices in Kolkata (Head Office), Delhi and Bengaluru.
Related: Indian subsidiary · FDI filing · FLA return · compliance calendar