Foreign company project office registration in India
India is a lucrative market for foreign companies looking to expand their business operations. If your company is planning to undertake specific projects in India, opening a project office is an ideal way to establish a physical presence in the country. However, it's essential to understand the legal and regulatory requirements for setting up a project office. In this article, we'll discuss the key steps involved in opening a project office for a foreign company in India.
A project office means a place of business to represent the interests of a foreign company for the purpose of executing a project in India.
The only difference between the liaison office and the project office is that the project office can carry out commercial activities pertaining to the particular project whereas the liaison office cannot execute any commercial activities.
A foreign company may be permitted to open a project office in India provided it has secured a contract or order from an Indian company to execute a project in India. The project office shall not undertake or carry on any other activity other than the activities relating or incidental to execution of the project.
The validity period of a project office is for the tenure of the project.
Permitted income is only the receipt of inward remittance from the parent company or head office through normal banking channels. After completion of the project, the office can remit surplus funds to the company.
A branch office of a foreign company is taxed as a foreign company in India at 41.82%. And it is required to file. a tax return in India every year.
Every project office shall get itself registered with the registrar of companies (ministry of corporate affairs) Obtaining approval from RBI, the project office is registered as an establishment of foreign company in India. On such registration, a CIN, i.e., corporate identity number, is allotted by the registrar of companies.
The following documents are required for opening a project office in India.
- Letter of intent and comfort letter from the authorized signatory of the parent company intending to support the operation in India.
- An authorization letter from the parent company in favor of a local representative.
- Board resolution from the parent company for setting up a project office in India.
- Existing company incorporation certificate/registration certificate, memorandum and articles of association (charter document) of the parent company duly attested by the Indian embassy or notary public in the country. of registration.
- The latest audited balance sheet and annual account statement of the parent company of the last three years duly attested and notarized in the English language.
- Details of the bank account of the parent company in the home country.
- Commitment statement from the organization to open to report / opinion sought from its bankers by the government of India / reserve bank of India.
- Expected investment/ expenses for operations in India.
- Rent agreement/ lease agreement of proposed local office.
- The number of people likely to be employed, including foreign nations, is large.nations.
- Details of business activity carried out in the home country by the applicant organization, products and services of the company in brief.
- Bankers certificate from India.
- Identity proof and address proof of all the directors – duly certified by a banker in the home country.
- Details of individuals or companies holding more than 10% of equity.
- Organization structure and its shareholding pattern details.
- Board resolution for opening up bank accounts and signed bank account opening forms of Indian banks.
- Full address of the office of the company in India, which is proposed to be its principal place of business in India.
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What is a digital signature certificate (DSC)?
A digital signature is software by which applicants sign the documents electronically.. Registrar of companies (ROC) mandates that the directors sign application documents using their digital signature. Hence, a digital signature is required for all directors of a proposed company.
- What is the director identification number (DIN)?
- What is a project office?
- What are the benefits of opening a project office?
- Who can open a project office in India?
- What is the minimum capital requirement for opening a project office in India?
- Do foreign companies need to register with the Reserve Bank of India (RBI) to open a project office in India?
- Can a project office undertake activities other than the specific project?
- What is the maximum duration of a project office in India?
- Can a project office open a bank account in India?
- Can a project office remit profits outside India?
- Is it mandatory for a project office to file tax returns in India?
- Can a project office hire employees in India?
- What are the employment and tax implications of hiring employees in India?
- Is it mandatory to obtain a Permanent Account Number (PAN) for a project office?
- Is it mandatory for a project office to obtain Goods and Services Tax (GST) registration?
- What are the compliance requirements for a project office?
- Can a project office be converted into a branch office or a subsidiary company?
- Can a project office be closed before the completion of the project?
