Introduction
Project office registration in India enables a foreign company to execute a specific contract in India for the limited duration of that project, under FEMA and RBI regulations via Authorized Dealer (AD) Category-I banks. It is not a separate legal entity, but a place of business tied to the project’s lifecycle.
What is a Project Office?
A project office (PO) is a place of business set up by a foreign company to represent its interests for executing a specific project awarded by an Indian company, with validity typically linked to the project’s completion. Unlike liaison offices, a PO can undertake activities related to the contract execution.
Why choose a Project Office?
- Purpose-built: Ideal when the foreign entity needs on-ground capability solely to deliver a particular project in India.
- Commercial scope: Can carry out commercial activities strictly tied to the awarded project, unlike liaison offices.
- Limited tenure: Naturally winds down with project completion, reducing long-term overhead.
Eligibility criteria
RBI permits project office registration in India when a foreign company has an Indian contract and at least one of the following is satisfied: the project is funded by inward remittance, funded by a bilateral/multilateral agency, cleared by a competent authority, or supported by term loans from Indian banks/financial institutions to the awarding entity.
Key differences: PO vs Liaison vs Branch
- Liaison: Communication only, no income-generating activities; lower compliance but no commercial operations.
- Branch: Wider operational scope; can render services and earn income; higher track record/net worth thresholds.
- Project Office: Purpose-limited to the awarded contract; income restricted to project activities; tenure ends on completion.
End-to-end registration process
- Secure the Indian project/contract
- Obtain a duly executed contract or award letter from the Indian company describing scope, value, and timelines. This is the foundation for “project office registration in india.”
- Apply via AD Category-I Bank (Form FNC)
- Submit Form FNC through an AD Category-I Bank with notarized/apostilled corporate documents, contract copies, parent’s audited financials, power of attorney, board resolution, and KYC. The AD bank scrutinizes the application and can approve under RBI’s delegated powers if conditions are met.
- Receive approval and set up the office
- Upon approval, establish the office within six months; notify the AD bank of operational commencement. Approval validity is typically aligned to the project duration.
- Register with MCA/ROC (Form FC-1)
- Within 30 days of establishing a place of business in India, file Form FC-1 with the Registrar of Companies, along with required attachments and authorized signatory DSC.
- Open a dedicated bank account
- Open the PO’s account with the same AD bank; ensure all inflows are from the parent or the designated funding channel per the project’s funding terms.
- Obtain statutory registrations
- Apply for PAN, TAN, and GST (if applicable), plus any state-level Shops & Establishment, EPF/ESI registrations depending on staffing and activity.
Documents checklist
- Form FNC duly completed and signed.
- Notarized/apostilled Certificate of Incorporation, MOA/AOA of parent.
- Copy of project contract/award with Indian entity.
- Parent’s audited financials (typically up to 3–5 years) and banker’s report.
- Board resolution and power of attorney in favor of the authorized representative.
Timelines
- AD Bank/RBI approval: ~4–6 weeks depending on completeness and scrutiny.
- ROC FC-1 filing and approval: ~2–3 weeks after establishment.
- Bank account and tax registrations: ~1–2 weeks each, often parallel.
Compliance after setup
- Maintain books and get the PO accounts audited annually.
- File prescribed returns and ROC compliances for foreign companies (e.g., FC forms/annual filings as applicable).
- Adhere to FEMA reporting, KYC updates with AD bank, and tax filings including TDS/GST where applicable.
Tax treatment
A project office is treated as part of a foreign company’s presence in India; income attributable to Indian project operations is taxable per foreign company rates, with repatriation allowed subject to taxes and settlement of liabilities. Evaluate MAT applicability and withholding obligations for contracts.
Restricted or special cases
Certain country origins or sensitive sectors/locations may require prior RBI/Government consultation; defense projects with Ministry of Defence contracts follow special dispensation. Always confirm the latest FEMA and RBI circulars before filing.
Common pitfalls to avoid
- Using a PO for activities beyond the awarded project’s scope.
- Missing the 30-day ROC FC-1 deadline after establishment.
- Opening the PO account with a different bank than the AD bank handling approval.
Conclusion
For foreign companies executing time-bound contracts, project office registration in India offers a focused, compliant route to operate onshore while keeping scope tied to the project. Plan documentation early, route the application via an experienced AD bank, complete ROC FC-1 on time, and maintain ongoing FEMA, tax, and MCA compliance for a smooth lifecycle.