Liaison Office Setup in India 2026

Your foreign parent company wants to explore the Indian market before committing capital. You need a legal presence that lets you communicate with customers, suppliers, and potential partners without crossing into commercial activity. That is exactly what a Liaison Office does under FEMA 1999 and the Reserve Bank of India Master Direction on Establishments. Without RBI approval and proper registration through the MCA21 portal, your liaison activities are illegal. In 2026, enforcement has tightened. RBI issued show-cause notices to 47 unapproved liaison offices in FY24-25 alone, triggering penalties under FEMA 1999. KAMRIT Financial Services LLP manages the full setup from pre-application scrutiny to AAC filing in year two. We coordinate with your AD Category-I bank, prepare the Form FNC filing, obtain RBI approval, register with MCA21, and secure PAN and TAN. Starting price is ₹74,899.

What is Liaison Office Setup in India 2026?

A Liaison Office is a non-commercial representative presence established in India by a foreign company incorporated outside India. It is defined under FEMA 1999 Section 6(6)(a)(i) and the RBI Master Direction - Foreign Exchange Management (Establishment of Branch/Office outside India) Regulations, 2022. The office is permitted to undertake only liaison activities: promoting imports and exports, facilitating technical or financial collaboration between the parent company and Indian entities, and acting as a communication channel. It cannot raise income in India, enter into contracts on its own behalf, or conduct any trading or manufacturing activity. The RBI acts as the primary regulator through the relevant AD Category-I bank. The Ministry of Corporate Affairs governs incorporation through MCA21. The Foreign Exchange Department of the RBI issues the final approval. A Liaison Office must file an Annual Activity Certificate with the RBI every year by the end of July. Failure to file triggers automatic de-registration. The entity also needs a separate PAN from the Income Tax Department and a TAN for tax deduction purposes.

Who needs this

Not every foreign company qualifies. The RBI sets a profit track record test and limits the sectors that may receive automatic approval. KAMRIT checks your eligibility at the first consultation.

• The parent foreign company must have average net profit of at least USD 50,000 or equivalent per year for the immediately preceding three financial years
• The parent company must be incorporated in a country whose income tax is at least 15% or where similar reciprocity is established under a Double Taxation Avoidance Agreement
• The purpose must be strictly liaison, promotional, or preparatory in nature, no commercial or trading activity
• The foreign company must not be engaged in the production of goods or services in India
• The proposed Liaison Office must have at least 50% foreign equity unless it qualifies for the non-resident Indian route
• RBI approval route for the entity determines whether the AD bank can grant in-principle approval or whether the application goes to the RBI regional office
• The sector of the parent company must not fall under defence, telecom, private security, or government-employee-related services
• A net worth threshold of the parent company of minimum USD 500,000 or equivalent is typically required by most AD Category-I banks
• If the parent company is a subsidiary or step-down subsidiary, separate track record proof may be required for each relevant entity
• Government-owned foreign companies have a separate approval window through the relevant ministry before approaching RBI

Documents required

The RBI and MCA21 each require a distinct document stack. Incomplete submissions cause rejection or multiple queries that extend timelines by months. KAMRIT prepares every document from certified translations to board resolutions.

• Form FNC Part A filed through the AD Category-I bank with a covering letter from the bank
• Certified copy of the Certificate of Incorporation of the foreign parent from the country of incorporation (apostilled or consularised)
• Memorandum and Articles of Association or equivalent constitutional document of the parent company
• Latest three years audited financial statements of the foreign parent company
• Board resolution of the parent company authorising the establishment of a Liaison Office in India and naming the authorised signatory
• Power of Attorney in favour of the India-based representative or attorney, executed on stamp paper and apostilled
• KYC documents of the proposed authorised representative in India: PAN card, Aadhaar, address proof, passport-size photographs
• Address proof of the proposed Indian office: rental agreement, noc from landlord, and property tax receipt or electricity bill
• Bankers report from the bank where the parent company holds an account abroad
• Certificate from an Indian chartered accountant confirming that the proposed activities are within the permitted scope under FEMA
• Application for PAN in Form 49A or 49AA as applicable, filed with the Income Tax Department
• Form for TAN allotment filed with the Income Tax Department

How KAMRIT runs it, step by step

The Liaison Office setup moves through two parallel tracks: RBI approval through the AD bank, and MCA21 registration. Both must be obtained before any activity begins. KAMRIT manages both tracks concurrently where possible.

1. Eligibility Pre-Check and Document Audit. KAMRIT reviews the parent company financials, place of incorporation, and proposed activities to confirm eligibility under FEMA 1999. We identify gaps in the board resolution, financials, or power of attorney that must be corrected before submission. This stage typically takes 3 to 5 working days from receipt of documents.
2. Form FNC Preparation and AD Bank Submission. KAMRIT completes Form FNC Part A and the covering letter and submits to the nominated AD Category-I bank along with all supporting documents. The bank conducts its own due diligence, obtains an in-principle approval where eligible, and forwards the file to the RBI Foreign Exchange Department. RBI file typically takes 4 to 6 weeks with the AD bank before it reaches RBI.
3. RBI Approval Letter. Once RBI is satisfied with the application, it issues an approval letter specifying the permitted activities, validity period, and reporting obligations. If RBI raises a query, KAMRIT drafts and files the response on behalf of the client. RBI approval stage runs 6 to 12 weeks from the date the file reaches RBI, depending on the completeness of the submission and whether queries arise.
4. MCA21 Company Incorporation. Simultaneously or after RBI in-principle approval, KAMRIT files SPICe+ Part A and Part B through the MCA21 portal to obtain the CIN for the Liaison Office. The DIN of the Indian-authorised representative is allotted at this stage. Stamp duty is paid and the incorporation certificate is generated. This takes 3 to 5 working days from submission of complete documents.
5. PAN and TAN Allotment. After MCA21 incorporation, KAMRIT files Form 49A or 49AA for PAN and the TAN form with the Income Tax Department. Both are allotted online and the numbers are typically received within 5 to 7 working days.
6. Bank Account Opening. KAMRIT assists in opening an NRE or NRO bank account for the Liaison Office with the AD bank or another authorised dealer. The RBI approval letter and incorporation certificate are submitted. Account opening takes 3 to 5 working days.
7. First Year Compliance and AAC Briefing. KAMRIT briefs the client on the Annual Activity Certificate obligation due by July 31 each year. We provide an AAC preparation timeline for the following year so no filing is missed. Failure to file AAC triggers automatic de-registration by RBI.

Timeline

From the date KAMRIT receives complete and clean documents, the total end-to-end timeline ranges from 14 to 18 weeks. The RBI-controlled stages carry the most uncertainty. The AD bank pre-scrutiny runs 4 to 6 weeks. The RBI processing stage, once the file reaches the Foreign Exchange Department, runs 6 to 12 weeks. This means the RBI approval letter typically arrives 10 to 14 weeks after document submission to the AD bank. MCA21 incorporation runs in parallel and is usually completed within 3 to 5 weeks of submission. PAN and TAN take another 2 weeks. Bank account opening adds 1 to 2 weeks. KAMRIT-controlled stages, document preparation, form drafting, and correspondence with the AD bank, account for approximately 2 to 4 weeks of this total. Government holidays, RBI query rounds, and incomplete document submissions are the main variables that extend timelines beyond 18 weeks. Clients with clean financials and complete board resolutions in English with apostille tend to receive RBI approval within the 10-week range.

How our pricing compares

KAMRIT Financial Services LLP charges a starting fee of ₹74,899 for Liaison Office Setup. IndiaFilings charges ₹59,999 to ₹79,999 depending on urgency, with government fees billed separately. Vakilsearch quotes ₹65,000 to ₹85,000 for the same service and also adds government fees. ClearTax prices the engagement at ₹70,000 to ₹95,000 with filing charges for subsequent years. LegalRaasta offers a basic package starting at ₹49,999 but marks up government fees and charges separately for each form and bank correspondence. KAMRIT's ₹74,899 fee is all-inclusive for document preparation, AD bank form filing, MCA21 SPICe+ filing, PAN and TAN application, and initial compliance briefing. Government fees, RBI processing fee of approximately ₹10,000 plus MCA21 stamp duty and filing fees of ₹1,000 to ₹2,000 depending on state, are billed separately as these are statutory charges payable to government portals. Courier, apostille, and translation costs are also excluded. Where competitors bundle government fees within a headline price but reveal add-ons at checkout, KAMRIT provides a fixed service fee and itemises government charges upfront. Our pricing reflects the fact that Liaison Office setup is technically more complex than company incorporation, involving two regulators and an AD bank rather than a single MCA portal.

Common mistakes KAMRIT avoids

Most RBI rejection letters and delay notices share the same root causes. KAMRIT has handled over forty Liaison Office applications and has a clear picture of where first-timers go wrong.

• Filing Form FNC without the AD bank covering letter, RBI rejects applications submitted directly or without the bank certification
• Submitting financials translated in-house without certified translation, RBI requires translations by a certified translator or attested by the Indian embassy
• Not confirming the three-year profit track record before approaching KAMRIT, this causes an automatic eligibility rejection and delays the entire engagement
• Listing permitted liaison activities too vaguely in the application, RBI requires specific examples of the intended liaison work rather than generic descriptions
• Opening a bank account before receiving RBI approval letter, this is a FEMA violation and can result in a show-cause notice
• Forgetting the Annual Activity Certificate, clients who miss the July 31 AAC deadline risk automatic de-registration by RBI even if the liaison office is otherwise compliant
• Assuming MCA21 incorporation alone is sufficient, the Liaison Office legally cannot exist without RBI approval regardless of the CIN
• Not registering for GST when cross-charging services, if the liaison office invoicing crosses the ₹20 lakh threshold for inter-state supplies, GST registration becomes mandatory