Project Office Setup for Foreign Companies in India

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Project Office Registration

A foreign company can establish a project office in India either on a temporary basis or a permanent project office, provided the foreign company has been awarded a project to be executed by them in India from the government or the private sector. Registration of the Project Office with the RBI & ROC must be completed before it starts operating. There are certain conditions that need to be fulfilled before an application is moved for Project Office Registration.

To register a project office, an application is made with the Category 1 AD Bank with a complete set of documents, including a copy of the project agreement and an undertaking that the project shall be funded with inward remittance from abroad or through an arrangement with the bilateral or multilateral international finance agency. After approval of the application by the RBI, the project office needs to be registered with the ROC and local police within 30 days of such approval.

Checklist for Project Office Registration

Formal Contact of the Project

The foreign entity must have secured a Project in India, and a formal and legally binding agreement must be executed for the same financial statement.

Clearance of Project

That the project has been cleared by the appropriate and recognised authority or ministry, and if applicable, by the environment ministry.

Foreign Funding

The project must be funded out of the Inward remittances from abroad, or an International Financing Agency must fund the project.

Indian Funding

In the absence of foreign funding, the Indian Entity awarding the contract shall avail the term loan from a Public Financial Institution or a bank in India.

Project Office Registration Process

The process of registering a foreign company’s project office requires approval from the RBI. Upon receiving the approval, the company can straightaway apply for registration with the ROC (Registrar of Companies), and receive the Project Office Registration Certificate, along with PAN and TAN. Here are the steps to be followed:

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Step-1 : Attestation or Legalisation of Documents

All documents which are required to be filed with RBI of the foreign company like their certificate of incorporation, board resolutions, the moa and articles of the foreign company and the documents of the authorised signatory of the foreign company need to be legalised either through Indian Embassy or to be apostilled as per Hague convention.

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Step-2 : Filing of Application with RBI through AD Bank

The application for registration of a Project office of a foreign company is filed in Form – FNC to the reserve bank of India through AD Bank (Authorised Dealer). The AD Bank plays a crucial role as all the communication to the RBI has to be routed through them. We have an excellent relationship with many banks in India, which certainly help in applying to the RBI and Followup

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Step-3 : Verification of KYC from Banker of Parent Company

After the FNC Form is filed with the AD Bank, a request for verification of documents is sent to the banker of the foreign company. This process is also known as swift based verification. After receipt of confirmation of the documents from the foreign banker, the application is submitted to the RBI for their approval. The RBI may seek clarification or any additional document which needs to be submitted.

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Step-4 : Approval of RBI for Project Office Registration in India

After company incorporation, the Bank A/c has to be opened, wherein the foreign direct investment must reach within 180 days of incorporation of the company with advance intimation to Banker. Post investment the company is under strict liability to file adequate reporting with the RBI reporting of FDI received within 30 Days.

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Step-5 : Registration of Project office of Foreign Company with the ROC

Within 30 days of the permission of the RBI the foreign company should apply to the ROC for registration of the foreign company. In case the foreign company have Indian directors then a DIN number of such director is needed, and the digital signature of the authorised signatory is required to e-file statutory forms with the ROC for their approval.

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Step-6 : PAN Card, Tax Deduction Number & Bank A/c Opening

Income Tax Department allots a unique 10 Digit alphanumeric number as a permanent account number, also known as PAN Number. To comply with TDS provisions, every taxpayer needs to obtain a Tax Deduction Account Number. These identification numbers are essential to do compliance with the tax rules. The bank account of the project office can be opened after allotment of Pan Number by the Income Tax Department.

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Step-7 : Other Registration and Licensese

After the Project office is operational, there are various other compliance related activities, which depends on the nature of the business and the state-specific laws, which apply to all entities doing commercial activities. For example registration under shops and establishment act, Goods and Services Tax (GST), Professional Tax Act, Provident Funds Act, Employee State Insurance Act (ESIC), etc

Documents Required for Project Office Registration

Establishing a Project Office requires a set of documents for RBI approval and ROC incorporation. These include the documents of the foreign company, audited financial statements, board resolution, and KYC documents of the authorised signatory. Here’s a comprehensive list of such documents:

List Of Documents
FNC Form duly signed by AR	Proof of Registered Office
Note on Location / Proposed Activity	NOC from the owner of the premises
Certificate of Incorporation & MOA	Audited Financial of past 5 Years
Board resolution to Open a project Office	KYC of the Authorised Signatory