Liaison Office Setup in India
RBI-Approved Representative Office for Foreign Companies

A liaison office is an office established in India by a foreign company to act as a communication channel between the parent company abroad and parties in India. It is also called a representative office, because its job is to represent the parent, not to trade on its own account. It has no separate legal identity of its own; it is simply an extension of the foreign parent, present in India for liaison purposes.

Setting one up requires approval from the Reserve Bank of India under FEMA, and registration with the Registrar of Companies once approved. It is the lightest-touch way to test the Indian market, build relationships, and explore opportunities before committing to a full operation. If you instead want to carry out business activity, a branch office or an Indian subsidiary may suit you better.

Not every foreign company qualifies to open a liaison office. The Reserve Bank of India sets eligibility conditions to ensure the parent is financially sound. The main requirements are a profit-making track record — the foreign parent should have a profit-making track record during the immediately preceding three financial years in its home country; a net worth of at least USD 50,000 or its equivalent, certified by its auditors; and approval and routing — the application is made in Form FNC through an Authorised Dealer (AD) Category-I bank, under the automatic or the RBI approval route.

Where a newly set-up entity does not meet the track record or net worth tests on its own, it may still be able to apply on the strength of a letter of comfort from its parent that does meet the conditions. Confirming eligibility at the outset is the first thing we check, because it determines the route and the documentation.

Foreign companies often weigh three options for entering India, and the right choice depends on what you intend to do. The liaison office vs branch office question is the most common, and it comes down to activity and income.

A liaison office can only act as a communication channel and cannot earn income. A branch office is allowed to carry out specified commercial activities and can earn income in India, with a wider scope and higher compliance. An Indian subsidiary is a separate Indian company that can carry on full business operations, with the strongest standing and the most compliance. So the liaison office is the lightest presence, the branch office sits in the middle, and the subsidiary is the fullest commitment. If your goal is only to represent the parent and build relationships, the liaison office is ideal; if you need to trade or earn income, a branch office or subsidiary is the right route.

A liaison office is approved for a defined period and carries ongoing compliance, even though it earns no income. Staying compliant protects the approval and allows smooth renewal. The key points are: validity — a liaison office is generally approved for three years and can be renewed, subject to the rules for the sector; the Annual Activity Certificate (AAC) — an AAC from a Chartered Accountant must be filed each year with the AD bank and the authorities; ROC annual filings — annual filings with the Registrar of Companies, including the foreign company return; the income tax return — filed each year, despite the office earning no income; and intimation of changes — any change in the office, address, or activities must be intimated to the authorities.

We manage the full compliance calendar, including the AAC and the annual ROC return, so your liaison office stays in good standing year after year and renews without friction.

Liaison office setup brings together RBI approval, foreign-exchange rules, and company-law registration in one process — and a misstep with the FEMA route or the reporting can delay or jeopardise the approval. That is exactly where experienced help pays off.

We provide end-to-end support: eligibility assessment, RBI approval and Form FNC filing through an AD bank, ROC registration in Form FC-3, PAN, and the ongoing Annual Activity Certificate and compliance. Our team understands cross-border requirements and keeps the process clear and well-documented from the first conversation to the final approval. For the connected filings, our RBI and FDI team supports the wider compliance picture. We help foreign companies establish a liaison office in India with clarity, speed, and full compliance.