Minimum Eligibility and Document Requirements for Liaison Office Registration in India

A Liaison Office (LO), also called a Representative Office, is a form of legal business entity introduced for foreign companies/investors looking to explore India's dynamic and diverse market. In general, it is established to conduct market research to determine the environment and potential customer base for the products/services of a  foreign company. Let’s explore minimum eligibility criteria and essential documents required for setting up liaison office in India effectively! 

What is a Liaison Office?

A Liaison Office set up takes place for representing the parent company or group companies in India to conduct certain tasks such  as export or import  from or to India, promoting business collaborations between parents or group companies.

An LO serves as a bridge between the head office of a foreign company and its operations in India. The office belongs to a foreign company, and it is restricted from engaging in commercial or profit-generating activities. The parent company of an LO is liable to meet all its expenses.

Purpose of a Liaison Office in India

Some primary purposes of establishing a Liaison Office in India are described below;

• Market Research and Collecting Information related to business

• Creating & Expanding Business Relationships and Network

• Promoting Activities of Parent Company

• Supporting Existing Operations of Parent Company

• Serving as a Communication Channel between Parent Company & Indian Authorities & more  

Eligibility Criteria for Liaison Office Registration

The Reserve  Bank of India (RBI) has specified eligibility criteria for foreign liaison office registration in India that foreign companies must fulfill to set up their liaison office here. The minimum eligibility criteria goes as below;

1. Profitable Track Record for Last 3 Years: A foreign company must have a proven record of making healthy profit for the last three consecutive financial years. It is a key requirement for setting up an LO in India as it reflects financial stability  and credibility.          

2. Net Worth: A company must possess a minimum net worth of $50,000 to qualify for starting an LO.

3. Alignment of Business Operations/Activities: The activities of the proposed liaison office should not be dissimilar to the parent company's business activities and must be in alignment with the  parent company's overall  business objectives.  And it should not indulge in commercial activities.                              

Now, as you are aware of the minimum eligibility for liaison office registration to set up a liaison office, let's move forward to the documents’ requirement part.

Documents Required for Liaison Office Registration  in India

To set up a liaison office in India, one must satisfy a set of documents' requirements  for LO registration in India. It's required to submit a duly filled application form to the Reserve Bank of India (RBI) along with the required documents through an authorized dealer bank. When it comes to the essential documents for establishing an LO, the parent company  must  provide the following documents;

Duly Filled Application Form (Form FNC): Foreign  companies need to fill out Form FNC; it outlines the crucial information of the foreign company and its proposed LO.          

MOA & AOA: Along with the application form, it's crucial to provide a certified copy of the Memorandum of Association (MOA) and Articles of Association (AOA), two key foundational documents of a company defining  the parent company's objective and its operational framework.            

Certificate of Incorporation (COI): The parent company must provide a certified copy of its Certificate of Incorporation that establishes its legal existence. The COI should also be attested by a Notary Public in the country where it is issued.  

Board Resolution: A formal board resolution must be provided, as it authorizes the establishment of the LO in India. It should clearly outline the purpose and scope of the LO's operations.

Bank Statement: The parent company should also provide a recent bank statement copy. It reflects the company's financial health.    

KYC Documents of Authorized Signatory: The parent company is also required to provide KYC documents for the authorized signatory.  

Apart from these key liaison office registration process documents, there are some additional documents that may need to be provided to set up a liaison office in India successfully.

Adhere to the above-described liaison office registration eligibility and documents’  requirement to set up your LO hassle-free!  

Conclusion

Setting up a liaison office in India is a strategic move of foreign companies aiming to expand their market reach globally. Navigating possibilities and challenges associated with targeting the diverse Indian market can help make informed decisions. Understanding the minimum eligibility for liaison office registration and the documents required is the cornerstone of the registration process. Consult a liaison office registration service providing specialist in India to set up your LO effectively.