Liaison Office


A foreign company can set up its business in India by establishing a Liaison Office (LO), subject to the compliances of the foreign direct investment (FDI) policy  of the Reserve Bank of India (RBI).
The main objective to establish an LO is to explore and understand business and investment scenario in India. It also focuses at collecting information about the Indian market opportunities and imparting information about a company and its products to prospective Indian customers.


As per section 2(42) of the Companies Act, 2013, a “foreign company” means any company or body corporate, incorporated outside India, which—

  • has a place of business in India, whether by itself or through an agent, physically or through electronic mode; and
  • conducts any business activity in India in any other manner.
As per regulation 2(e) of the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016, “Liaison Office” means a place of business to act as a channel of communication between the principal place of business or Head Office or by whatever name called and entities in India but which does not undertake any commercial /trading/ industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel.
“Net Worth” means total of paid-up capital and free reserves, less intangible assets as per the latest audited balance sheet or account statement, certified by a certified public accountant or any registered accounts practitioner, by whatever name.


Before making an application to the RBI, entities should fulfil certain eligibility criterions, as mentioned below:

  • They should have a profit making track record during immediately preceding 3 financial years in their home country.
  • They should have net worth not less than USD 50,000 or its equivalent.


A foreign company should apply through a designated Authorized Dealer (AD) Category-I bank to the general manager of the Foreign Exchange Department of the RBI. The process is as follows:

  1. An application is filed in a specified FNC form along with other documents, such as:
    • Customer request letter on the letterhead of the applicant entity;
    • Latest audited Balance Sheet for last 3 years of the applicant entity; 
    • English version of the Certificate of Incorporation / Registration or Memorandum & Articles of Association attested by Indian Embassy / Notary Public in the country of registration;
    • Bankers report of the applicant in the host country;
    • CA certificate for certification of net worth and profitability of the applicant entity;
    • Any other documents, as may be asked by the RBI/AD.
  2. After submitting the above mentioned documents, the entire application is to be reviewed by the bank.
  3. On the basis of the documents and information submitted, the bank may ask for further documents and information, as it may deem fit to process the application.
After vetting the documents and making further enquires, the RBI may approve or reject the application.
Once, the application gets approved by the RBI, an acknowledgement of the same shall be sent to the registered email address, along with the approval letter indicating UIN to establish LO.
If the non-resident entity is not able to open the LO within 6 months’ time, due to reasons beyond its control, the AD bank may consider an application for extension of time for a further period of 6 months for setting up the LO. Any further extension of time shall require prior approval of the RBI.
After the RBI’s approval, there are different kinds of approvals and registrations under other government authorities, such as:
  1. Application for Permanent Account Number (PAN) 
  2. Opening of bank account
  3. Application to ROC for getting a “Certificate of Establishment of Place of Business in India” 
  4. Application to the Director General of Police (DGP) of the state concerned, in which LO has established its office, within five working days of the LO becoming functional


The indicative time line is 15 to 20 days from the date of application to the RBI. However, it may take more time as well depending on the complexity of each case.


  • In case documents are in languages other than English, then they should be duly translated in English language and certified. Where such translation is made outside India, it shall be authenticated by a signature and a seal, if any, of-
    1. the official having custody of the original document; or
    2. Notary (Public) of the country (or part of the country) where the company is incorporated
    Where such translation is made in India, it shall be authenticated by-
    1. an advocate, attorney or pleader, entitled to appear before any High Court; or
    2. an affidavit of a competent person having in the opinion of the Registrar, adequate knowledge of the language of the original document and the one in English.
  • Initially, the RBI approval to set up an LO is only for a period of 3 years. AD bank may extend the validity period for a period of further 3 years from the date of expiry of the original approval / extension granted by the RBI, subject to such directions issued by the RBI.

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