Thursday, March 21, 2013

Establishment of Liaison Office In India

           Foreign companies engaged in manufacturing or trade activities can establish the Liaison office(LO) in India to
  • Representing in India the parent company or group companies registered outside India.
  • Promoting Exports or Imports
  • Promoting Technical or Financial Collaborations between parent / Group companies or with their Joint ventures in India.
  • Acting as a communication channel between the parent company and Indian companies.
Foreign Insurance company should obtain prior approval from Insurance Regulatory and Development authority to establish Liaison office.

Reserve Bank of India will  scrutinize the application based on the following criterion

- Whether  100% FDI is allowed in the sector
- Profit making track record of the foreign company during the immediate three financial years.
- Net-worth not less than USD 50,000 or its equivalent
- Place of Liaison office in India
- Liaison office should not earn any profit in India through any sources
- all the Expenses of the Liaison of office shall be paid by the parent company and the amount should be routed through Authorized dealer banks.

Sunday, March 17, 2013

Establishment of Branch office in India

Foreign company's engaged in manufacturing and trading activities can establish the Branch office in India to

  • Export / Import of Goods
  • Rendering professional services
  • Carrying out research activities
  • Promoting technical or financial collaborations
  • Representing the parent company In India
Foreign Company shall obtain the prior permission from the Reserve Bank of India for establishing the Branch office.

RBI will scrutinize the application based on the following criterion

-Whether 100% FDI is allowed in the sector
- Profit making track record during the immediate five financial years
- Net-worth not less than USD 1,00,000 or its equivalent 
- Place of Branch office in India
- Profits of the Branch office can be  repatrible after the net taxes in India.