By foreign company with RBI & ROC Registration
Liaison or representative office is generally set up by foreign companies or MNC’s in India Who are interested to enter the Indian market. Liaison offices are generally opened to study the possible market scenario of their products or services in India and to provide information about the company and its products to prospective customers in India. Its parent foreign company has to send funds to maintain liaison office in India.
PROCEDURE FOR SETTING UP LIAISON OFFICE:
Any foreign company intending to establish a Liaison Office in India is required to obtain prior approval from the Reserve Bank of India (RBI) through Authorized Bankers(AD), which may take up to 3-6 weeks. Approval is usually granted for 3 years and has to be renewed on expiry. The name must be the same as that of the foreign parent company. The Indian Income Tax authority can impose Income Tax on the liaison office if they find any transaction of commercial nature through PE in India.
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Activities permitted by Liaison office
Activities not permitted by Liaison office
Following Documents are required to submit for approval
Eligible companies to open liaison office:
A foreign company must fulfill two primary conditions before qualifying for the establishment of a liaison office:
- They must have a three-year record of profitable business in the home country; and,
- They must have a minimum net worth of US$50,000 verified by the most recent audited balance sheet.
Liaison Office Registration of a foreign Company $ 1499/-
All Inclusive Professional Fee and Out of Pocket Expense | Pay Govt. fee on Actual Basis.
After proper scrutiny, AD Category – I bank shall forward the application in form FNC together with their comments/ recommendations to the RBI for its approval and allotment of Unique Identification Number (UIN) to LO. After receipt of the UIN from the Reserve Bank, the AD Category-I bank shall issue the approval for establishing LO in India.
If the LO applicant is a non-governmental/non-profit organization engaged in any of the activities mentioned under the Foreign Contribution (Regulation) Act 2010 (FCRA), they will have to obtain a certificate of registration under the FCRA instead of seeking permission through FEMA.
Every Liaison office registered with RBI shall have to get itself registered with the Ministry of Corporate Affairs. The MCA will allot Corporate Identity Number (CIN) to such a company. Nowadays CIN is allotted along with Permanent Account Number (PAN) & Tax Deduction Number (TAN). Once PAN is allotted, it should open the bank account as well.
The validity of Approval:
After the approval, LO has to establish its office within six months. The approval shall elapse, in case the office is not set up in six months. Companies looking for any further extension of time shall require prior approval of RBI.
Registration with State Police:
Finally, after the approval from RBI, the liaison office needs to register it with the state police office. The application must be accompanied by the RBI approval copy and KYC of all authorized persons in India and the foreign company.
GST Registration & IEC :
Once the Liaison office Bank Account is opened and the checkbook is received, it would need a copy of the check for making an application for the GST Registration and Import Export Code for the Liaison Office of the foreign Company in India.
What happens when approval time expires?
Once the validity period expires, the liaison office has to either close down or to be converted into a joint venture/wholly-owned subsidiary in conformity with the FDI policy.
Compliance requirements by Liaison Office:
Liaison Offices have to file Annual Activity Certificates (AAC) certified from Chartered Accountants, at the end of March 31, along with the audited Balance Sheet on or before September 30 of that year. In case the annual accounts of the LO are finalized with reference to a date other than March 31, the AAC along with the audited Balance Sheet may be submitted within six months from the due date of the Balance Sheet to the designated AD Category I bank and a copy to the Directorate General of Income Tax (International Taxation), New Delhi along with the audited financial statements including receipt and payment account.
File form 49C as per Section 285 of the Income Tax Act, 191 together with prescribed documents.
Liaison Office may be required to withhold tax from certain payments and hence to comply with the requisite tax withholding requirements under the domestic tax law
The Liaison office may require to comply with GST obligation under reverse tax mechanism for availing certain services, if applicable.
The liasion office may have to comply with various Labour laws of India, if there are any employees in LO.
Filing of Various forms and certificate from Chartered Accountant at the time of closing of LO.
How AVS & Associates can assist you in:
- Obtaining approval of RBI for Establishment of Liaison office in India.
- Getting Liaison office registered with Registrar of Companies.
- Obtaining CIN of Liaison Office
- Obtaining PAN / TAN, GST, IEC and registration under Labour Laws.
- Maintenance of Financial books of Accounts of Liaison office.
- Payroll Processing of Liaison office.
- Filing of Withholding Tax Returns / GST Returns on monthly / Quarterly basis.
- Annual Audit of Books of accounts.
- Issuance of Annual Activity Certificate (AAC).
- Getting all Statutory Compliances with regard to Labour laws within timelines.
- Reporting of Liaison office on annual basis with concerned authorities like MCA, Police Department, Income Tax Department, AD Banker.
- Issuance of Various certificates as may be required by LO in regular course.
Why Select Us?
Our foremost priority is to provide Instant Support and are always very particular on adherence of timely delivery so that you don’t miss out on deadline. We have worked with some most time strict clients and we have never missed our target. Our one thumb rule says that “If we miss a deadline we are out”. Accounts and Finance function need always alert eagle eye approach!
Our prices are most reasonable and under budget that you never realize any cost burden in your organization in comparison of value addition we bring in. We believe in adoption of your business first and fee shall take care of itself mantra. We never bill for disappointment and take ownership. It is how we like to be treated and that is how our customers are served.
We at AVS & Associates only recruit experienced, skilled professionals who have proven expertise in their field. With a diverse Team of Chartered Accountants, Company Secretaries, Lawyers, and various other consultants on board, we offer end to end financial and legal service under one roof saving time and energy and bring synergy effect between various functions.
Having over 20+ years experience in the leadership team ensure we maintain highest ethical standards and never go out of trust with you. We always believe in long term relationship with our clients hence integrity is something we value the most. We ensure transparency in communication, service and cost. Our specialized experts helps in maintaining high quality.