Foreign Company Registration explained: this guide covers what Foreign Company Registration means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A foreign company wishing to establish a presence in India without incorporating a subsidiary can operate through a Branch Office (BO), Liaison Office (LO), or Project Office (PO). These are regulated under FEMA 1999 (Master Direction on Establishment of Branch/LO/PO) and require prior RBI approval (general permission or specific).
Three Types of Foreign Presence
| Feature | Liaison Office (LO) | Branch Office (BO) | Project Office (PO) |
|---|---|---|---|
| Purpose | Communication channel, market research only | Business operations (restricted) | Specific project only |
| Revenue generation | Not permitted | Permitted (prescribed activities) | For project activities only |
| Taxation | Not taxable (no income) | Taxable as foreign company (35%) | Taxable |
| Duration | 3 years (renewable) | Until RBI renewal (3 years) | Duration of project |
| RBI approval | Yes | Yes (or AD bank for some) | General permission if project contract meets conditions |
Liaison Office (LO) — Key Points
- Allowed activities: Represent parent company, promote exports/imports, research, liaison between HQ and Indian customers
- Cannot carry on any commercial or industrial activity
- All expenses must be met through inward remittances from parent
- Annual Activity Certificate (AAC) filed with RBI via AD bank
Branch Office (BO) — Permitted Activities
- Export/import of goods
- Rendering professional/consultancy services
- Carrying out research linked to parent's business
- Promoting technical/financial collaborations
- IT services and software development
- Not permitted: Retail trading, agriculture, plantation, real estate
Project Office (PO)
Foreign companies with a contract to execute a project in India can open a PO under general permission if the project is funded by inward remittance or from a bank/financial institution in India. PO activities restricted to project execution.
Registration Under Companies Act 2013
Foreign companies establishing BO/LO/PO must also register with MCA under Section 380 of Companies Act 2013 within 30 days of establishing place of business. Form FC-1 filed with RoC. Annual returns (Form FC-3) and financial statements (Form FC-4) required.
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