Liaison Office Setup in India

RBI Approval Under FEMA, ROC Registration and Annual Compliance for Liaison Offices

A Liaison Office (LO) — also called a Representative Office — is the simplest India entry mode for a foreign company. It allows the foreign parent to explore the market, promote its products, facilitate communication, and gather market intelligence — without any income-generating activities. A Liaison Office cannot undertake commercial, trading, or industrial activity, earn any income from India, or sign contracts on behalf of the parent. It is fully funded by the foreign parent through inward remittances. RBI approval under FEMA 22(R) is mandatory, initially granted for 3 years and renewable thereafter.

Key Facts at a Glance

Parameter	Details
Legal Nature	Extension of foreign parent; not a separate Indian entity
RBI Approval	Mandatory via AD Category I Bank (Form FNC)
Permitted Activities	Market research, product promotion, liaison, information gathering
Prohibited	No revenue earning, no commercial activity, no contract signing
Funding	100% from foreign parent via inward remittances
RBI Approval Period	Initially 3 years; renewable
ROC Registration	Form FC-1 within 30 days of establishing the office
AAC Deadline	Annual Activity Certificate by September 30 each year

Our Services

RBI Application (Form FNC)

Filing Form FNC through an AD Category I Bank — covering parent company profile, proposed liaison activities, funding arrangements, and projected annual expenses.

ROC Registration (FC-1)

Registration as a foreign company with ROC within 30 days — filing parent's charter, directors list, and principal officer details.

Tax Registration

PAN registration (required for TDS on rent, salary, and vendor payments), TAN for TDS deductions, and advisory on Indian tax obligations.

Annual Activity Certificate

CA-certified AAC confirming only approved liaison activities were carried on and no income was earned from India — filed with AD Bank and RBI by September 30 annually.

RBI Approval Renewal

Filing renewal application before expiry — providing AACs for all years, confirming continued need, and requesting 3-year extension.

Liaison Office Closure

NOC from tax authorities, final AAC, ROC deregistration, RBI intimation, and repatriation of residual funds to the parent.

Frequently Asked Questions

What activities can a Liaison Office perform?

LO can: (1) represent the parent company in India; (2) promote export from or import to India; (3) promote technical/financial collaborations; (4) act as communication channel. The LO cannot earn any income, sell goods/services, sign contracts, or receive payment from Indian parties.

What are the annual compliance requirements?

Annual Activity Certificate (AAC) to AD Bank and RBI by September 30 annually; FLA return with RBI by July 15 if applicable; TDS compliance for all payments (rent, salaries, professional fees); and ROC annual filing if required.

When to choose Liaison Office over Branch Office or subsidiary?

Liaison Office suits companies exploring the market, maintaining relationships without generating local revenue, or monitoring Indian group companies. Once the company decides to generate revenue, it must switch to a Branch Office or incorporate a subsidiary.

Setting Up a Liaison Office in India? We Handle RBI Approval to Annual Compliance.

RBI Form FNC, ROC registration, annual activity certificate, approval renewal, and LO closure — complete Liaison Office services.