Summary: Foreign companies looking to establish a temporary presence in India for a specific project can set up a project office instead of incorporating a subsidiary. This requires appointing an Authorized Representative (AR), who must be an Indian resident with a valid PAN. The process begins with obtaining approval from the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA), 1999, by filing Form FNC with an AD Category I Bank. Once the project office is established, the AR must notify the Registrar within 30 days via Form FC-1, along with mandatory attachments such as the parent company’s charter documents, a list of directors, declarations regarding legal compliance, and proof of identity and address. Additionally, foreign documents must be translated into English and either apostilled, notarized, or consularized, depending on the parent company’s jurisdiction. These steps ensure compliance and legal validity for operating in India.
A foreign company (“Parent Company”) can establish its business operations in India by incorporating a wholly owned subsidiary or a subsidiary company. However, if the foreign entity intends to set up a business for a specific purpose or for a defined period to undertake operations, it may opt to establish a project office. With the rise of startups and the global push for ease of doing business, many foreign companies are choosing to set up project offices in India as a strategic entry point.
Mandatory Requirement before setting up Project Office
Designating the Authorised Representative (“AR”), the AR can be a foreign national but must be a Indian resident having a valid PAN. The AR can be designated either by passing the special resolution or by the power of attorney.
Pre-condition of Setting up Project Office in India
The parent company is required to seek approval from the Reserve Bank of India (“RBI”) in accordance with the provisions of the Foreign Exchange Management Act, 1999 (“FEMA”) when it intends to open a Project Office.
The form FNC is an application form to be filed to AD Category I Bank
Approval from RBI
After filing the form FNC with the AD Category I Bank, within 30 days of setting up the Project Office in India, the AR shall intimate the Registrar in form FC-1.
Mandatory attachments in form FC-1
1. Charter document of Parent Company
2. A list of director and secretary of the Parent Company
3. Declaration that none of the Directors of the Parent Company or the authorised representative in India has ever been convicted or debarred from formation of companies and management in India or abroad
4. Power of attorney or board resolution in favour of the authorised representative(s)
5. Copy of approval / intimation filed with requisite Authority(s)/Regulator(s)
6. Copy of PAN/ Passport for Authorized Representative
7. Id proof of foreign directors and AR
8. Address proof of foreign directors and AR
Translation and Apostilled/Notarized/Consularized of documents
The apostille or notarization process authenticates the documents to ensure their legality and validity in India. The specific requirements may vary depending on the parent company’s incorporation, whether under commonwealth or under the Hague Convention.
Further those documents which are in language other than English must be translated in English language either in India or outside India.
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