Liason Office Registration
"A Liaison Office (also known as Representative Office) can undertake only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India. Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office outside India. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian customers. Permission to set up such offices is initially granted for a period of 3 years and this may be extended from time to time by an AD Category I bank.
A Liaison Office can undertake the following activities in India:
1. Representing in India the parent company / group companies.
2. Promoting export / import from / to India.
3. Promoting technical/financial collaborations between parent/group companies and companies in India.
4. Acting as a communication channel between the parent company and Indian companies."
Branch Office Registration
"Permissible Activities for Branch Office:
a). Companies incorporated outside India and engaged in manufacturing or trading activities are allowed to set up Branch Offices in India with specific approval of the Reserve Bank. Such Branch Offices are permitted to represent the parent / group companies and undertake the following activities in India:
i. Export / Import of goods.
ii. Rendering professional or consultancy services.
iii. Carrying out research work, in areas in which the parent company is engaged.
iv. Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
v. Representing the parent company in India and acting as buying / selling agent in India.
vi. Rendering services in information technology and development of software in India.
vii. Rendering technical support to the products supplied by parent/group companies.
viii. Foreign airline / shipping company.
Normally, the Branch Office should be engaged in the activity in which the parent company is engaged.
b) Retail trading activities of any nature is not allowed for a Branch Office in India.
c) A Branch Office is not allowed to carry out manufacturing or processing activities in India, directly or indirectly.
d) Profits earned by the Branch Offices are freely remittable from India, subject to payment of applicable taxes."
Project office Registration
General Permission for Project Office:
Reserve Bank has granted general permission to foreign companies to establish Project Offices in India, provided they have secured a contract from an Indian company to execute a project in India, and
i) the project is funded directly by inward remittance from abroad; or
ii) the project is funded by a bilateral or multilateral International Financing Agency; or
iii) the project has been cleared by an appropriate authority; or
iv) 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. However, if the above criteria are not met, the foreign entity has to approach the Reserve Bank of India, Central Office, for approval.
Setting up of Project Offices by foreign Non-Government Organisations/Non-Profit
Organisations/Foreign Government Bodies/Departments, by whatever name called, are under the Government Route. Accordingly, such entities are required to apply to the Reserve Bank for prior permission to establish an office in India, whether Project Office or otherwise.
Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within enterprise. It cover the arm length price. Transfer Pricing is govered under Income Tax Act.