Startup India Registration from Wellcorp Office
Things to know
Liaison Office Registration India
What Is Liaison Office Registration?
A liaison office, also known as a representative office, acts as a communication bridge between a foreign company and its Indian subsidiaries. Liaison office registration in India is done by foreign companies to research and assist their business prospects in the country.
Why Incorporate Liaison Office?
Liaison offices are a valuable resource for international investors. It allows foreign investors to research the Indian sector to build a fast-growing market while reducing their financial, legal, and administrative duties. Expenses for such offices must be covered by inward remittances from the head office outside India.
The liaison office (LO) can help in promoting import and export from and to India, technical and financial participation, market research, and gathering input from international parent/group businesses.
Features of Liaison Office Registration
Activities Allowed for Liaison Office in India
Following are the activities that can be done by a liaison office in India:
Benefits of Liaison Office Registration
Eligibility for Liaison Office Registration
Fulfilling the following criteria is a prerequisite for establishing a liaison office in India.
Net Worth Requirement:
The net worth for a foreign parent company must be more than $50,000, attested by their auditors. They must also have a proper track record of their profits for the previous three years.
No Activity That Generates Income:
Since the liaison office is not allowed to earn income inside India, the parent company must fund its operational expenses.
Documents Required for Liaison Office Registration Online
Documents Needed From Parent Company:
Documents Required From the Authorized Signatory:
Liaison Office Registration Process
Liaison Office Registration Process
Step 1: Application for Digital Signature Certificate (DSC) of Authorized Signatory
As per the Information Technology Act, a digital sign is equivalent to a normal signature. It has been made compulsory to digitize all the applications to the Registrar of Companies (RoC). So, the first step in registration is to get DSC for the authorized signatory.
Digital Signature Certificate is given by Certifying Authorities that are approved by the government. One can apply for (DSC) by following a few steps:
There will be a video verification and the application for your DSC will be complete. Using the DSC, the authorized signatory can authenticate the registration of the application.
Step 2: Filling Out an Application With Reserve Bank of India Through AD Bank
A liaison office application form (FNC) is filed by a foreign company. The RBI gets this application through AD bank through which all the communication with RBI is routed.
Step 3: KYC Verification by the Banker of a Foreign Company
The documents are submitted to the banker of the foreign company as a request to examine them which is termed as swift-based verification. After this process, the application is sent to the Reserve Bank of India for approval. RBI can claim the documents later if the need arises. (KYC check is the process of verifying the client’s identity when establishing an account and periodically thereafter)
Step 4: Approval of RBI for Liaison Office Registration
AD bankers follow a specific policy for approving the liaison office in India. If the automatic route (foreign entity's principal business falls under sectors where 100% foreign direct investment is permitted) is not available, cases are forwarded to the RBI for prior approval which will be a one-week process.
Step 5: Liaison Office Registration With RoC
Once the company is formed, a bank account is opened and the Foreign Direct Investments (FDI) must be received within 180 days with the banker being announced early. The new company cannot start its business activities unless the capital has been collected in India.
Step 6: Tax Deduction Number, PAN Card, Opening a Bank Account
The income tax department of India provides a 10 digit number as a Permanent Account Number (PAN). If the liaison office receives that number, it is eligible to open a bank account. Tax Deduction Numbers are required for every taxpayer to comply with Tax Deducted Norms (TDS).
Step 7:Registration With State Police
As an important step, the liaison office must register it with the state police. The application includes RBI approval, KYC of all authorized persons in India and the parent company.
Step 8: GST Registration and Import and Export Code (IEC)
Once the bank account is created and the cheque book is issued, the liaison office claims for a copy of the cheque book to apply for the import and export code and GST registration.
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