Foreign companies looking to explore the Indian market without engaging in commercial activities can set up a Liaison Office (LO) in India. Liaison Office registration is regulated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA), 1999.
This Saving Mantra blog explains the step-by-step process for Liaison Office registration in India, eligibility criteria, documents required, timelines, post-registration compliance, and common mistakes—crafted to help you rank higher on Google and stay fully compliant.
What is a Liaison Office?
A Liaison Office (also known as a Representative Office) acts as a communication channel between the foreign parent company and Indian entities.
It cannot undertake commercial, trading, or industrial activities in India.
Permitted Activities of a Liaison Office
- Representing the parent company in India
- Promoting export/import from or to India
- Facilitating technical or financial collaborations
- Acting as a communication channel between head office and Indian companies
🚫 Not Allowed: Earning income in India, signing contracts, or carrying out business operations.
Eligibility Criteria for Liaison Office Registration
- Foreign parent company must have:
- Minimum 3 years of profitable track record
- Net worth of USD 50,000 or more
- Applicant must not be from prohibited sectors/countries (as per RBI norms)
Step-by-Step Process for Liaison Office Registration in India
Step 1: Check Eligibility Under FEMA
Ensure the foreign company satisfies RBI criteria related to:
- Profit track record
- Net worth
- Sectoral eligibility
Step 2: Preparation of Documents
Prepare the application along with supporting documents such as:
- Certificate of incorporation
- Memorandum & Articles of Association
- Audited financial statements
- Banker’s report
- Board resolution for LO setup
Step 3: File Application with Authorized Dealer (AD) Bank
- Submit Form FNC to an Authorized Dealer (AD) Category-I Bank
- The AD bank scrutinizes documents and forwards the application to RBI
Step 4: RBI Approval
- RBI reviews the application under FEMA guidelines
- Upon satisfaction, RBI issues approval letter
⏳ Approval Timeline: 4–6 weeks (may vary)
Step 5: ROC Registration
After RBI approval:
- Register the Liaison Office with the Registrar of Companies (ROC) using Form FC-1
- Obtain Certificate of Establishment
Step 6: PAN, TAN & Bank Account
- Apply for PAN & TAN
- Open an Indian bank account for LO expenses (funded via inward remittances)
Documents Required for Liaison Office Registration
- Certificate of Incorporation (parent company)
- MOA & AOA (translated if not in English)
- Audited financials (last 3 years)
- Net worth certificate
- Board resolution
- Passport & address proof of authorized signatory
Validity of Liaison Office Approval
- Initial approval is generally valid for 3 years
- Extension can be sought from RBI before expiry
Post-Registration Compliances
- Annual Activity Certificate (AAC) submission
- Filing of financial statements with ROC
- Compliance with FEMA & RBI reporting
- Renewal of approval (if applicable)
Common Mistakes to Avoid
- ❌ Undertaking revenue-generating activities
- ❌ Delayed filing of Annual Activity Certificate
- ❌ Incomplete or improperly notarized documents
- ❌ Non-compliance with FEMA regulations
Why Choose Saving Mantra for Liaison Office Registration?
- ✔ End-to-end RBI & ROC coordination
- ✔ FEMA-compliant documentation
- ✔ Faster approvals with expert handling
- ✔ Ongoing compliance and renewal support
Frequently Asked Questions (FAQs)
Q1. Can a Liaison Office earn income in India?
No, it cannot earn income or undertake commercial activities.
Q2. Is GST registration required for a Liaison Office?
Generally no, as it does not carry out taxable supplies.
Q3. Can approval be extended after 3 years?
Yes, extension can be obtained from RBI.
Q4. Is physical office mandatory in India?
Yes, a registered place of business is required after approval.
Disclaimer
This blog is for informational purposes only and does not constitute legal, financial, or regulatory advice. RBI and FEMA regulations are subject to change. Readers are advised to consult professional experts before proceeding with Liaison Office registration.