New guidelines regarding establishment of Liaison Office/Project Office/Branch Office (LO/PO/BO)
India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 10 most favored countries for FDI inflow. This clearly gives an indication that we are moving high with PM Modi’s expectations of becoming one of best places in the world for doing business. Taking a step ahead with this new RBI guidelines regarding establishment of Liaison Office/ Branch Office/ Project Office have been issued which will be effective from 31st March, 2016. Following changes have been made making the process easier for the establishment of the said offices:
1) Delegation of Power to AD (Authorised Dealer) Banks for approval of application to set up LO / BO in India except in the following cases:
The applicant is a citizen of or is registered/incorporated in Pakistan;
The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a BO/LO/PO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands;
The principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting. In the case of proposal for opening a PO relating to defence sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/ entered into an agreement with Ministry of Defence or Service Headquarters or Defence Public Sector Undertakings. There shall be no requirement of any approval from RBI also only for such cases;
The applicant is a Non-Government Organisation (NGO), a Non-Profit Organisation, or a Body/ Agency/ Department of a foreign government.
However the AD bank has to report to the RBI regarding the receipt of application for further generation of UIN. Earlier permission from RBI was required to be taken for setting up a LO/PO/BO.
2) Validity for establishment of LO engaged in construction & development business and NBFCs has been set for two years. In all other cases the validity of setting up of LO is for 3 years. PO’s tenure is till the completion of the said project.
3) AD banks are now authorized to grant approval to shift office to another city in India. No approval required if change of office is within the same city; only an intimation of new address needs to be filed with the AD bank.
4) If there is no change in the ownership of foreign company, AD bank may permit change in name of LO/BO/PO. However if the change is due to merger/acquisition/change in ownership of the parent company, there is a requirement of closing the existing LO/BO/PO and taking fresh approval for the same.
5) LO/PO/BO shall establish the office within six months of getting the approval the non -compliance of which shall result into elapsing of the said approval. Earlier there was no clarification on such time limit. Any further extension of time shall require prior approval of Reserve Bank of India.
Requirements for Private Limited Company
Cost of Service
Registration done within 15 to 20 days
Everything below is included:
- Free DSC for 1 Director
- DIN for 2 Directors
- Name Reservation
- MOA, AOA & All Incorporation Documents
- Certificate of Incorporation
- Company PAN & TAN [After Incorporation]