\n\nNext in the series is the business entity, foreign liaison office. Foreign companies can open their liaison office in India, but they are not permitted to perform commercial operations like sales or purchase. They can only liaison on behalf of a foreign company. As per FEMA, liaison office means a business to act as a channel of communication between the principal place of business or a head office by whatever name called and entities in India.<\/p>\n\n\n\n
a. Permitted Activities<\/strong> All the activities are to be funded by the foreign company. This will be treated as reimbursement of expenses, which will be for income tax purpose treated as income with 10% to 15% of addition as margin.<\/p>\n\n\n\n b. Steps\/documents required for setting up liaison office.<\/strong><\/p>\n\n\n\n \u2022\tMust have generated profits from operation in the home country for previous 3 years. c. Permissions required for foreign liaison office in India<\/strong><\/p>\n\n\n\n \u2022\tPermission to set up initially granted for3 years, which may be extended from time to time by AD Category 1 bank. d. Investment route for liaison office: Conclusions:<\/strong> \u00a0This type of business entity is suitable for foreign companies to act as an intermediary channel of communication between the principal place of business or a head office and business entities in India. <\/p>\n\n\n\n Share & Review us at <\/strong>: <\/p>\n\n\n\n Facebook <\/strong>: https:\/\/www.facebook.com\/totalsols<\/a> Next in the series is the business entity, foreign liaison office. Foreign companies can open their liaison office in India, but they are not permitted to perform commercial operations like sales or purchase. They can only liaison on behalf of a foreign company. As per FEMA, liaison office means a business to act as a […]<\/p>\n","protected":false},"author":1,"featured_media":209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[87],"tags":[64,88],"class_list":["post-261","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-foreign-liaison-office","tag-business-incorporation","tag-foreign-liaison-office"],"_links":{"self":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/comments?post=261"}],"version-history":[{"count":2,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/261\/revisions"}],"predecessor-version":[{"id":265,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/261\/revisions\/265"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/media\/209"}],"wp:attachment":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/media?parent=261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/categories?post=261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/tags?post=261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\u2022 Develop products for the parent company.
\u2022 Provide employment to Indians.
\u2022 Procuring orders for the foreign company.
\u2022 Sharing vendor list of Indian suppliers.
\u2022 Promoting technical and financial collaboration between parent\/group companies and companies in India.
\u2022 Promoting export\/import from\/to India.<\/p>\n\n\n\n
\u2022\tMust have net worth as stipulated by RBI in the latest audited balance sheet.
\u2022\tDesignate a bank branch where your account will be opened (Post approval).
\u2022\tThis bank is treated as authorized dealer bank (AD bank) for your liaison office in India.
\u2022\tNotarized apostilled copy of certification of incorporation, memorandum and article of association, copy of last 3 years balance sheet, all pertaining to parent company.
\u2022\tIf the above documents are in a language other than English, a translated copy is required in English.
\u2022\tComplete address details of parent company.
\u2022\tBrief activities of liaison office.
\u2022\tBank details of parent company.
\u2022\tCertificate from parent company\u2019s bankers, stating the commencement date and no default in the format.
\u2022\tNOC from state police authorities, applicable only for specified countries.
\u2022\tLetter of authorization for authorizing resident representative in India to look for operations of liaison office.
\u2022\tOn successful verification, if no default is found, RBI will permit liaison office with unique identification number (UIN).
\u2022\tFurther liaison office has to apply for PAN number with Income Tax Department.<\/p>\n\n\n\n
\u2022\tApplication to be filed in Form FNC-1 to RBI with necessary documents through AD bank.
\u2022\tApproval from RBI to be obtained.
\u2022\tShould apply with ROC to obtain certificate of establishment of place of business in India.
\u2022\tPost this, PAN and TAN should be applied. Nowadays, ROC is giving this along with certificate of establishment.
\u2022\tFurther mandatory registrations required: a. Shops and Establishment. B. Professional Tax (employer). C. IEC.<\/p>\n\n\n\n
<\/strong>1. Automatic route.
2. Sectors where 100% FDI allowed, no need for obtaining approval. It is an automatic route.
3. Approval route: The business activities which do not fall under 100% FDI, those sectors need to take prior approval from GOI.<\/p>\n\n\n\n
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