Project Office

A foreign company can set up its business in India by establishing a Project Office (PO), subject to the compliances of the foreign direct investment (FDI) policy of the Reserve Bank of India (RBI).
A person, resident outside India, permitted by the RBI to establish a PO in India may remit outside India the surplus of the project, net of applicable Indian taxes, on its completion, on production of some documents, and establishing the net profit or surplus, as the case may be, to the satisfaction of the authorized dealer through whom the remittance is affected.
As per regulation 2 (f) of 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, a PO means a place of business in India to represent the interests of the foreign company executing a project in India, but excludes a Liaison Office.
A person, resident outside India, has secured, from an Indian company,a contract to execute a project in India, and
  • the project is funded directly by inward remittance from abroad; or
  • the project is funded by a bilateral or multilateral International Financing Agency; or
  • the project has been cleared by an appropriate authority; or
  • a company or entity in India awarding the contract has been granted term loan by a Public Financial Institution or a bank in India for the project.
A foreign company should apply through a designated Authorized Dealer(AD) Category-I bank to the general manager of the Foreign Exchange Department of theRBI. The process is as follows:
  1. An application is filed in a specified FNC form along with other documents, such as:
    • English version of the Certificate of Incorporation / Registration, Memorandum & Articles of Association, attested by Indian Embassy / Notary Public in the country of registration;
    • Bankers report from the applicant’s banker in the host country;
    • Power of Attorney in favour of signatory of FNC form, in case the head of the overseas entity is not signing the FNC form;
  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.
  4. An AD Category-I bank, subject to the provisions of 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, then grants approval.
  5. In case no office is opened within six months from the date of the approval letter, the approval shall lapse.
  6. If the person, resident outside India, is not able to open the office within the stipulated time frame, due to reasons beyond their control, AD Category-I bank may consider granting extension of time for setting up the office by a further period of six months.
  7. Any further extension of time shall require a prior approval by the RBI in this regard.
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 the Registrar of Companies (ROC) for getting a “Certificate of Establishment of Place of Business in India”
  4. Application to the Director General of Police (DGP) of the concerned state, in which PO has established its office, within five working days of the PO 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-
    Where such translation is made in India, it shall be authenticated by-
    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
    3. an advocate, attorney or pleader, entitled to appear before any High Court; or
    4. 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.
No person, resident outside India, shall forma PO without permission of the RBI. A company, incorporated outside India, shall not require any approval for establishing any office in India if it is:
  1. A banking company which has obtained necessary approval under the provisions of the Banking Regulations Act, 1949; or,
  2. An insurance company which has obtained necessary approval from the Insurance Regulatory and Development Authority established under section 3 of the Insurance Regulatory and Development Authority Act, 1999.

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