Liason Office Registration

Description

Process for Liaison office Registration

STEP 1 –  Application for Digital Signature of Authorised Signatory

The process of Liaison Office registration begins with application for Digital Signature Certificate. A digital signature is the equivalent of physical signature under the Information Technology Act. As per new guidelines, all applications to the Registrar of Companies are filed in digital format and are therefore required to be authenticated using a digital signature of the authorized signatory. To obtain a Digital Signature, the concerned signatory will have to file an application to a Certified Agency, with the prescribed documents and application fees. You can avail our services to apply for a DSC in India.

STEP 2 – Filing Application for AD Bank’s approval

After the authorized representative or signatory has obtained a Digital Signature Certificate, the next step is to seek approval for opening a liaison office. For opening a liaison office, approval can be sought from the AD Category-I Bank itself if 100% FDI is allowed in the sector to which it belongs. For this, the concerned foreign company will have to submit Form-FNC to the AD Category-I Bank (AD). We are networked with many banks in India, which operate as an AD Category-I Bank for foreign companies. Contact us, (direct to the form) if you need our assistance.

STEP 3 – Verification of KYC from Banker of Parent Company

After the FNC Form is filed with the AD Bank, it sends a request for verification of documents filed with the form to the banker of the foreign company in its country of origin. This process is also known as swift-based verification. Only after the documents are verified by the banker, the AD bank will be able to grant approval for setting up a liaison office.

STEP 4 – Approval of RBI for Liaison Office Registration in India

As mentioned before, liaison offices can be set up in India, usually with the approval of AD Bank itself if 100% FDI is allowed in the sector. However, approval from RBI will be required if 100% FDI is not allowed in the sector, if the applicant is involved in sectors like telecom, defense, private security, or information and broadcasting, if the applicant entity is an NGO/NPO, or if the applicant entity belongs to countries like Pakistan, Afghanistan, Iran, China, Bangladesh, Sri Lanka, Hong Kong, or Macau, or any foreign entity which wants to open a branch in the North-east Indian States, Jammu and Kashmir, or Andaman & Nicobar islands. In such circumstances, the AD bank will further the FNC application to the RBI after the documents have been verified by the foreign banker. It usually takes a week for the RBI to process the application and grant approval.

STEP 5 – Registration of Liaison Office with the ROC

After the approval of the RBI or the AD Bank, whichever applicable, has been obtained, the concerned foreign company can set up its liaison office in India. However, such an established office will have to get registered by the Registrar of Companies. For this, an application is filed in form FC-1 within 30 days from the date on which the approval was received. The filing can be done online on the official website of the Ministry of Corporate Affairs. Once the application reaches the ROC, it is examined carefully, and if found to be correctly filed, is approved by the ROC, after which the ROC will finally register the liaison office of the foreign company.

STEP 6 – Receive Certificate of Incorporation, PAN Card, Tax Deduction Number & Bank A/c Opening

Upon successful registration by the ROC, the liaison office of the foreign company will receive a Certificate of Incorporation from the ROC, a PAN and a TAN from the Income Tax Department to comply with the tax and TDS related provisions of the Income Tax Act of 1961. With the allotment of PAN, the liaison office can also open a bank account in the AD Bank. However, the LO cannot open more than 1 bank account without obtaining prior permission from the RBI.

STEP 7 – Registration with State Police

Finally, the liaison office needs to register itself with the state police (in the office of the superintendent of Police). The application must be accompanied by the document showing RBI approval and KYC of all authorised persons in India and the foreign company. Registration with State Police is not mandatory but is needed only if the foreign company is based in countries like Pakistan, Afghanistan, Iran, China, Bangladesh, Sri Lanka, Hong Kong, or Macau.

STEP 8 – Other Local level Registrations

Post registration, liaison offices will also have to undertake several local and state-level registrations applicable to it. These are the same as the registrations applicable for any other company incorporated in India. A few of these include Shops and Establishment Registration, GST Registration, Professional Tax Registration, EPF Registration, ESI Registration, and IEC Registration.

Documents Required for  Liaison Office Registrations

1. Board Resolution
2. Covering letter
3. Draft prescribed Form Part 1
4. Draft prescribed Form part 2 (Declaration)
5. LO Application
6. Foreign direct investment eligibility and Source of Fund
7. RBI format as per KYC
8. 3 years of audited financial statements for the year ended December 2018, December 2019, and December 2020
9. Copy of Certificate of Incorporation (COI)
10. Copy of Memorandum of Association (MOA)
11. Articles of Association (AOA)
12. Applicants background details
13. List of Shareholders (Approval not required but for ROC registration)
14. List of Directors (Approval not required but for ROC registration)
15. Declaration u/s 380 (Approval not required but for ROC registration)