The word liaison derived from link or connection that may be between two groups or organizations. Liaison office act as mean of communication between two offices where one is located in India and other located at outside countries. The establishment of these liaison offices is only being possible after getting permission from Reserve Bank of India. The expenses of these liaison offices in India are met by their head office located at abroad.
- Liaison office can only act as source of communication between two offices is not allowed to carry any of the business activities or any commercial deals in India. This kind of office is not allowed to earn any income in India.
- These offices are only carried out liaison activities out off any other commercial jobs.
- The main task of this liaison office is used to provide company information and its related products and services to the potential clients and to give market information to the company. It supports its head office / parent company while imparting the market opportunities.
- It helps the parent company in promoting export / import from / to India.
- It helps parent company in supporting any of the financial or technical collaboration.
Liaison office is only being established after getting approval from RBI regional office under the jurisdiction where the respective office is being situated. The permission of liaison office is for 3 years that can be extended from time to time. Under the same rules; liaison office needs to file annual activity certificate that should be prepared and attested by a Chartered Accountant to ensure that the same liaison office works as per the prescribed rules and regulations.
Liaison/Branch/Project Office in India
Project office in India is similar like Liaison office but the only difference is project office can execute the respective project in India. RBI offers several rules and regulations to foreign companies to operate their project office in India to regulate and control their project s over here. Similarly, branch office in India is another segment of foreign companies where one can open its branch office in India with the aim of promoting their services, buying or selling products from / to agents in India, representing the parent company and lots more that acts like as other domestic companies of India.