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Establishing a Liaison Office in India


What is the purpose of setting up a Liaison office (LO)?

Liaison offices are a popular option for foreign investors seeking to explore and understand the business environment of the country. This entity type is also beneficial for promoting the parent’s company business and act only as a communication channel between the foreign parent company and Indian companies.

What are the eligibility criteria for establishing a Liaison office in India?

A liaison office can be established after seeking permission from RBI under the provisions of Foreign Exchange Management Regulations (FEMA), 1999. Following are the requirements for opening an LO:

  • Three-year record of profitable operations during the immediately preceding three financial years in the home country
  • Minimum net worth of USD 50,000 verified by the most recent audited balance sheet or account statement.

If a company does not meet these requirements, but is a subsidiary of a company that does, the parent company may submit a Letter of Comfort on the subsidiary’s behalf.

What are the documents required for registration of an LO?

To begin the process of setting up a liaison office in India, the foreign company should submit the following documents:

  • A notarized and apostilled copy of the liaison office charter or Memorandum and Articles of Association in English;
  • Certificate of incorporation or registration of the parent company
  • Name and address of the liaison office in India;
  • List of directors;
  • Details of activities to be undertaken in India
  • Name and address of the company’s official representative based in India;
  • Financial Statement of the previous three years of the parent company duly attested by its auditors;
  • Certificate from the auditors of the parent company that the net worth of the parent company is more than USD 50,000 or its equivalent

The liaison office should also obtain a Permanent Account Number (PAN) from the income tax department and a Unique Identification Number (UIN) from the RBI. The application for registration should be forwarded to the RBI by a designated AD Category – I Bank.

Can an LO maintain more than one bank account in India?

If an LO wants to open more than one account, it has to obtain prior permission of the Reserve Bank of India (RBI) through its Authorized Dealer (AD) bank justifying the reason for the additional account.

If at a later stage, a Liaison office is upgraded to a Branch office (BO), will it be required to open a bank account again?

A Liaison office can be upgraded to a Branch office and can continue with the same bank account provided that the bank account is re-designated as a BO account.

Is it mandatory for an LO to register with police authorities?
Only applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong, Kong, Macau, and Pakistan have to get registered with the State Police authorities. Copy of the approval letter for persons from these countries shall be marked by the AD Category I bank to the Internal Security Division – I, Ministry of Home Affairs, Government of India for necessary action and record.

Can a foreign company set up more than one liaison office in India?

All requests for establishing additional Liaison offices can be submitted to the AD Category-I bank in a fresh FNC form. However, the documents mentioned in form FNC need not be submitted again, if there are no changes to the documents submitted earlier.

  • If the number of offices exceeds 4 (one LO in each zone - East, West, North and South), the applicant has to justify the need for additional office/s and prior approval of RBI is required.
  • The applicant may identify one of its offices in India as the Nodal Office, which shall coordinate the activities of all its offices in India.
  • In case the existing LO is shifting to another city in India, prior approval from the AD Category-I bank is required. However, no permission is required if the LO is shifted to another place in the same city subject to the condition that the new address is intimated to the designated AD Category-I bank


For more FAQs on setting up Liaison Office in India, please click here.


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