How to Set Up Project Office of Foreign Entities in India?

 The launch of “Make in India” program by the Government of India has unlocked new avenues for foreign entities to enter in the domestic market of India. According to the report by United Nations Conference on Trade and Development ("UNCTAD") 2020, India ranks 9^th position in the matter of Foreign Direct Investment (FDI) in 2019.  According to the data released by the Reserve Bank of India in August 2020, the net foreign direct investment inflows into India was USD 4,3013 million.    

Whenever foreign entities want to establish their venture in India, there are different ways to enter in the domestic market of India, these include:

·         By incorporating a company through establishing a joint venture.

·         By incorporating a limited liability partnership.

·       By establishing an office, according to their requirements. It could be a branch office; or a liaison office; or project office.

This post aims to impart insight about setting project office for foreign entities in India.

Establishment of a Project office in India:

Project office is a place, from where foreign companies execute a project in India. By establishing a project office of foreign entity in India, foreign entities understand the business environment of the country, utilize human resources and natural resources efficiently to accomplish the project in a stipulated time. Generally, foreign entities establish their project offices for a limited period of time. Establishing a project office in India requires approval from the Reserve Bank of India. Before setting up a project office in India, foreign companies need to fulfill some mandatory terms and conditions as below:

·       Foreign company needs to secure a contract with an Indian company to start a project. 

·      According to the Companies Act 2013 and RBI Guidelines, a Foreign company establishing a project office in India is required to be registered with the Registrar of Companies (ROC) and to comply with certain procedural formalities.    

Registration Procedures to Establish a Project Office:

Documentation:

Preparation of documents relevant to establishing a project office in India attested by Indian Embassy/ Notary Public in the Country of Registration.

Application to AD Bank:

Submission of application to establish a project office in India. 

UIN:

There will be an allotment of Unique Identification Number (UIN), after approval from RBI.

Filing with MCA:

After the establishment of the project office in India, foreign companies shall within 30 days the relevant e-form with MCA.

Opening of Bank account:

Project offices need to approach any AD Category-I Bank in India to open an account for its operations in India.

Post Incorporation Registration:

Registration under shops and establishment act, Goods and Services Tax (GST), PAN, etc.

Why Choose Indian Legal Services for Establishing Foreign Entities?

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Excellent track record of success in providing legal services in market advisory, finance, project finance, joint ventures, foreign collaborations, technology transfer, mergers and acquisitions, etc.

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New Delhi - 110092, India,

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