Liaison office is a representative office where the only liaison activities have been carried out. Liaison office in India acts as communication mean where two groups or organizations can communicate with each other. Most of the foreign based reputed companies and big enterprises have operated their liaison office in India. The expense and other cost in respect of liaison office in India are met by head office / parent office of the respective liaison office in India.Opening a liaison office in India is only being possible after getting permission by Reserve Bank of India. Besides these, there are several rules and conditions behind the setting up of liaison office in India.
- Liaison office in India is not allowed to carry any of the commercial activities like buying or selling of products or services with the aim of earning profit; these kinds of offices are only act as representative office to their parent office.
- Liaison office in India is only to support any of the collaboration with parent company in respect of financial or technical segments.
- Liaison office can collect information about the potential market and provide the same to the patent company. It also supports the parent company while providing latest launches of the company to the target audience.
- Opening a liaison office India is not more than as representative office to that of parent office.
Procedure to Open a Liaison Office / Branch Office in India
Under the procedure for setting up a liaison office in India is only be possible after getting approval from Reserve Bank of India. An application is to be made to the RBI regional office of the same state / jurisdiction where the office has located. In starting of opening a liaison office India the permission is only granted for 3 years that need to extend from time to time by filing an application to the same authority. As on with due time; an annual report that must be prepare and attested by CA needs to submit to the same authority that depicts that liaison office worked as per the guidelines and under the defined rules.
Similarly, companies outside India who are already engaged in manufacturing and trading of goods and services can open branch office in India with the permission of RBI. Such branch offices in India do not allow to carry manufacturing directly whereas these offices can represent their parent companies, carry import or export activities, can engage with research activities but their parent companies will involve in the same and serve the consultancy and professional services to their potential clients.