Establishing business operations in India through Liaison, Branch, or Project Offices is a vital strategy for foreign entities entering the Indian market. These models provide tailored levels of engagement to meet specific objectives and operational needs.

A Liaison Office serves as a communication conduit for the parent company. A Branch Office enables a wide range of activities, from import-export to research and consultancy. Meanwhile, a Project Office is designed for time-bound project execution as per contracts.

These approaches allow foreign entities to smoothly integrate into India’s dynamic economic landscape while addressing their distinct business goals.

Entities eligible for the formation of Liaison/Branch/Project Offices

• For Liaison Office– A requisite history of profitability over the immediate past three fiscal years in the home nation and a minimum net worth of $50,000 or its corresponding value.
• For Branch Office– A demonstrable history of profitability over the last five consecutive fiscal years in the originating nation and a net worth exceeding $100,000 or its equivalent.
• For Project Office– However, there is no specific eligibility for Project Office.

Sanctioned operations for Liaison/Branch/Project Offices

• Liaison Office- Liaison Offices are limited to non-commercial activities and serve as communication links between the parent company’s headquarters and entities in India. Their functions include market research, sharing information about the enterprise, and promoting potential partnerships in India.

While they can facilitate export/import activities and collaborations with Indian firms, they are not authorized to generate income within India.

• Branch Office- Foreign companies have the authority to set up Branch Offices (“BOs”) in India, allowing them to engage in a wide range of activities. These include facilitating the import/export of goods, providing consultancy services, conducting research aligned with the parent company, promoting technical or financial partnerships with Indian entities, representing the parent firm in India, acting as intermediaries in buying/selling activities, offering Information Technology (“IT”) services and software development, providing technical support for parent/group firm products, and serving foreign airlines or shipping companies.

Non-resident companies can also establish BOs within Special Economic Zones (“SEZs”) for manufacturing and service activities, subject to certain conditions like operating in sectors with 100% Foreign Direct Investment (“FDI”) allowance, compliance with the Companies Act, 2013, and self-sufficiency.

• Project Office- Project Offices (“POs”) can be established with the sole purpose of executing designated projects within India, strictly limited to the scope of the project-related activities and any actions tangentially associated with their execution.

Validity of Liaison/Branch/Project Offices

• Liaison Offices- Typically spanning a duration of three years, unless an exception applies to entities operating within the Non-Banking Financial Company (“NBFC”) domain or involved in the construction and development sectors, for which the validity period is reduced to two years.
• Branch Offices- There is no such specific validity prescribed for Branch Offices.
• Project Office- In accordance with the project’s duration.

How we can help?

We offer comprehensive support and expertise to facilitate the establishment of your business operations in India through the setup of a Liaison, Branch, or Project Office. Our team of seasoned professionals will guide you through the intricate regulatory landscape, assist in obtaining necessary permits, liaise with local authorities, and provide strategic insights to ensure a seamless and successful market entry. With our tailored solutions, you can navigate the complexities of doing business in India with confidence and efficiency.