Liason Office
In India, a location of business that serves as a liaison between entities in India and the main office or head office is referred to as a liaison office.
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Liason Office
In India, a location of business that serves as a liaison between entities in India and the main office or head office is referred to as a liaison office. These offices are only allowed to represent the parent firm in India and are not allowed to engage in any direct or indirect commercial, trading, or industrial activities.
The usual procedures for setting up a liaison office in India are as follows:
- Eligibility: The parent firm must demonstrate that it has operated profitably in its native nation for at least three years of its establishment.
- Application: Through an Indian authorized dealer bank, the parent business must file an application to the Reserve Bank of India (RBI). Financial accounts, the planned activities of the liaison office, and information about the nature of the firm must all be included in the application.
- RBI approval: After receiving the application, the RBI assesses it according to a number of factors. The RBI approves the liaison office’s creation if all requirements are met. Usually good for three years, this approval might be extended at a later date.
- Registration with Other agencies: The liaison office must register with the Income Tax Department and the Registrar of Companies (RoC) among other pertinent agencies after receiving RBI permission.
- Bank Account: In order to conduct business, the liaison office must open a bank account in India. This account needs to be kept open with an Indian dealer bank that has been approved.
- Compliance: The RBI and other authorities have mandated that the liaison office adhere to a number of regulatory and reporting obligations. This entails following foreign exchange management guidelines and providing the RBI with reports on a regular basis.
It’s crucial to remember that the procedure and specifications could change slightly based on the particulars of the application and the laws that are in effect at the time. Seeking advice from legal and financial professionals versed in the most recent laws pertaining to liaison offices in India is advised.