# Liaison Office Registration in India

> A liaison office lets a foreign company represent itself in India — promoting its products, coordinating with Indian buyers and suppliers and acting as a communication channel — without earning any income here. The parent needs a profit-making track record of three years at home and a net worth of at least USD 50,000. The application is made in Form FNC through an authorised dealer bank, and the office must register with the Registrar of Companies within 30 days.

Practice: Business Setup & Entity Registration — https://www.industax.com/services/business-setup/

A liaison office (LO) is the lightest way to be present in India. It can't trade, sign contracts or receive income; all its expenses are met by remittances from the parent. In return it is not taxed on profits, though it must deduct TDS on salaries and rent and file an annual statement of activities with the tax department in Form 49C.

Approval is usually given for three years (two years for NBFCs and construction companies) and can be extended. Every year the LO must submit an Annual Activity Certificate from a chartered accountant, with its audited accounts, to the AD bank, the Director General of Income Tax (International Taxation) and, where applicable, the State Police.

## Key facts

| Item | Detail |
| --- | --- |
| Law | FEMA (Establishment in India of a Branch, Liaison or Project Office) Regulations, 2016 |
| Eligibility | Profits in the last 3 years; net worth ≥ USD 50,000 |
| Application | Form FNC through an AD Category-I bank |
| ROC | Form FC-1 within 30 days of establishment |
| Annual | Annual Activity Certificate with audited accounts; Form 49C to tax department |

## Who needs this

- Foreign companies testing the Indian market
- Overseas manufacturers sourcing from Indian suppliers
- Foreign firms that need a coordination office without trading

## What's included

- Eligibility check and choice between LO, BO and subsidiary
- Form FNC and supporting documents through the bank
- ROC registration (FC-1), PAN and TAN
- First Annual Activity Certificate and Form 49C plan

## Documents

- Parent's certificate of incorporation and constitutional documents (apostilled)
- Audited financial statements for the last 3 years
- Board resolution for opening the office
- Letter of comfort from the parent where net worth criteria are met by group

## Process

1. **Assess** — Eligibility and activities confirmed.
2. **Apply** — Form FNC filed through the AD bank; UIN issued on approval.
3. **Register** — FC-1, PAN, TAN and bank account set up.

## Also covers

- **Representative office** — Common name for a liaison office.
- **Annual Activity Certificate** — Yearly CA certificate for the LO.

## FAQs

### Can a liaison office earn income in India?

No. A liaison office can only undertake liaison activities — representing the parent, promoting exports and imports, technical and financial collaboration and acting as a communication channel. It must be funded entirely by inward remittances from the parent.

### Is a liaison office taxable in India?

Not on profits, since it isn't allowed to earn any. But if it goes beyond permitted activities it can be treated as a permanent establishment of the parent and taxed. It must still deduct TDS on salaries and payments and file Form 49C every year.

### How long is a liaison office approval valid?

Generally three years, and two years for NBFCs and construction or development companies. An extension can be sought through the AD bank before expiry, or the office can be converted to a subsidiary or closed.

## Official sources

- Reserve Bank of India — FEMA notifications: https://www.rbi.org.in/Scripts/Fema.aspx
- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/

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Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.