Permission to set up a liaison office is granted by the Reserve Bank of India. Permissions are normally granted for a period of three years and can be extended by further request.

A liaison office is not permitted to generate revenue in India.

All expenses of a liaison office must be compulsorily met only out of inward remittances into a designated bank account opened in India by the liaison office for the specific purpose.

A liaison office cannot import goods of its own nor can it carry on any business of its own. A liaison office cannot raise any invoices on behalf of the parent company. All sale proceeds generated by the efforts of the liaison office must be directly paid to the foreign parent company by means of proper banking channels or negotiable instruments such as cheques (checks) and demand drafts. A liaison office cannot also charge any commission from Indian customers for providing liaison services.

A liaison office can carry on the following activities:

Collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers.

Promotion of export/import from/to India and also facilitate technical/ financial collaboration between parent company and companies in India.

Participation in Seminars/exhibitions/fairs and other events in India.

ROHIT NAAGPAL

rohitnaagpal@gmail.com