Project Office Registration
Project Office refers to a business location in India established to advocate for a foreign company overseeing a project in the country. It can only engage in activities necessary for carrying out the project, and cannot take on any extra tasks.
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Get Support AnytimeAn Overview of Project Office Registration
The establishment and management of the Project Office are controlled by the Foreign Exchange Management Act, of 1999 and the guidelines are issued by the Reserve Bank of India periodically. Foreign entities typically establish Project Offices to carry out projects awarded by Indian Companies. The RBI permits foreign entities to set up project offices in India if they have obtained a contract from an Indian company to carry out a project in India.
Below are the requirements for establishing a project office in India for a non-resident individual.
- The project needs to have obtained the required regulatory approvals, and
- The project receives funding directly from overseas remittances, or
- The funding for the project comes from an International Financing Agency that is either bilateral or multilateral.
- An Indian company or entity that has been granted a Term Loan by a Public Financial Institution or a bank in India is awarding the contract for the project.
Applications to set up a Project Office in a sector where 100% FDI is permitted must go through a specific AD Category I Bank. The forms FNC, along with the required documents mentioned in them, are submitted to an AD Category-I bank as per RBI guidelines.
PO may contact an AD Category I Bank in India to establish an Interest Foreign Currency Account for its activities in India, under specific terms. Foreign currency receipts from the Project Sanctioning Authority and remittances from parent/group companies abroad or bilateral/multilateral international financing agencies are the only credits allowed in the bank account. The only debits allowed are payments for expenses related to the project.
Benefits of Project Office Registration
- Allowed actions: The Project Office in India is simply an extension of foreign companies and is limited to activities directly related to project execution.
- Account at a financial institution: A foreign entity, excluding those from Pakistan, can open a bank account in India without needing approval from the Reserve Bank if they have been awarded a project contract by the Government authority or Public Sector Undertakings, or are permitted by the AD to operate in the country. Every Project Office has the option to establish two foreign currency accounts, typically in USD and the local currency of the project winner, as long as they are held at the same AD Category-I bank.
- Profit sending: AD Bank may authorize sporadic payments from the Project Office until the project is finished, as long as they are convinced of the legitimacy of the transaction and certain conditions are met.
- Expanding the range of fund and non-fund-based services: An AD Category I Bank can provide Fund/Non-Fund facilities to a Project Office if it complies with the approved Board policy, practices sound business judgment and adheres to the current rules/regulations set by DBR, RBI.
- Project Office Closure: Submission of requests for the closure of the Project Office and remittance of winding-up proceeds must be made to the specified AD Category - I bank with the required documents.
Requirements of Project Office Registration in India
- Official communication about the project
The foreign company must establish a protected project in India and enter into an official and legal agreement to assist with the financial statements concerning the project.
- Project completion
Ensure that the project has obtained authorization from the relevant and reputable authorities.
- Funds from abroad
Make sure the project receives financial support from the foreign country's inward remittance, or else an International Financing Agency will need to sponsor it.
- Funding from India
If there is no foreign funding involved, the Indian organization must secure the term loan from a Public Financial Institution or a bank within India.
Documents Required for Project Office Registration
- Completely completed Form FNC;
- Presentation of the Certificate of Incorporation / Registration, as well as the Memorandum of Association and Articles of Association, duly notarized by a Notary Public in the country of registration. If the original Certificate is not in English, it can be translated into English, notarized, and verified by the Indian Embassy/Consulate in the home country.
- The company's balance sheet has been audited for the past five years. If auditing is not required in the company's home country, a Certified Public Accountant or Registered Accounts Practitioner can provide a certified account statement showing the net worth.
- Bankers report in the host country/country of registration indicating how long the applicant has been banking with that bank.
- Power of Attorney will be granted to the individual signing Form FNC if the Head of the overseas entity is unable to sign the form.
Process of Project Office Registration
- Authentication of Documents
Filing all the foreign company's documents with the RBI is essential. The Document list consists of a certificate of incorporation, MOA and AOA of the foreign company, and board resolutions. Furthermore, ensure that the paperwork of the approved representative of the foreign organization is properly authenticated either through the Indian Embassy or through apostille by the Hague Convention.
- Submitting Application to RBI via Authorized Dealer Bank.
A request for the parent company's office application is submitted to the Foreign Company Department (FNC). The request is submitted to the Reserve Bank of India through an AD Bank (Authorised Dealer). The AD bank plays a crucial role as it serves as the intermediary for all communication with the RBI.
- Confirmation of KYC by the parent company's banker
A plea to review the documents is sent to the banker of the foreign company. The act of requesting verification is also known as swift-based verification. Once the foreign banker confirms the Documents, the application is then processed for approval. The RBI/AD may also request supplementary documents as necessary.
- Acceptance by RBI for Project Office Registration in India
After the company is officially formed, the next task is to establish a bank account for the company, with foreign direct investment needing to be deposited within 180 days of incorporation while notifying the banker beforehand.
- Establishing a Project Office for a Foreign Company with the ROC.
After getting the green signal from RBI to set up the Project Office in India, a request is made to register the foreign company's project office within 30 days of receiving approval. DIN is necessary if any Indian director and the authorized signatory require a digital signature for e-filing statutory forms with the ROC.
- PAN Card, TIN, and Opening a Bank Account
The PAN number, a 10-digit identifier, is assigned by the Income Tax Department of India. After the PAN number is acquired, the branch office can proceed to open its bank account. Every taxpayer must get a Tax Deduction Account Number to comply with all TDS regulations.
- Additional Registrations and Permits
Once the Project Office becomes inactive, various compliance activities depend on the type of business and specific laws of the state that apply to all entities involved in commercial activities. An example include the Goods and Services Tax (GST), Professional Tax Act, Provident Funds Act, and Employee State Insurance Act (ESIC).
How Corpseed can help in Project Office Registration?
Corpseed is one of the top consulting firms, offering comprehensive assistance in the finance business, guiding businesses through the necessary processes. When it comes to project office registration, corpse seeds play a vital role in ensuring a smooth and efficient process. We provide expert advice and handle all legal and regulatory requirements, helping businesses comply with the required standards. Our deep understanding of local laws and procedures allows us to minimize the complexities involved in setting up a project office.
- End-to-end services: We offer full support from the initial consultation to the final registration, ensuring that all aspects are covered without any hassle.
- Documentation assistance: Corpse Seed assists with the preparation and submission of necessary documentation, ensuring that all paperwork is accurate and conforms to legal standards.
- Regulatory compliance: We ensure that the business complies with all relevant laws and regulations, preventing potential issues during or after the registration process.
- Timely execution: With our expertise, we ensure that the entire registration process is completed quickly and efficiently, saving valuable time for businesses.
Connect With Corpseed
Connect with the Corpseed team to discuss your requirements at IVR: 7558640644 or hello@corpseed.com. It takes 20–25 minutes to discuss the requirement.
Dedicated Manager
Once you discuss the requirement, we will align a dedicated Account Manager to understand your business needs and assist throughout the process.
Real Time Update
Track the progress of your application and always know what’s in progress and what’s done.
Job Completed
Once the job is completed, you will receive registrations & certifications directly to your email ID and at your doorstep.
Frequently Asked Questions
Quick answers to common questions about this service.
How long does the Project Office hold its position?
The Project Office is valid for the duration of the project.
How do you go about setting up a Project Office in India?
Non-resident companies are allowed to set up a Project Office in India as long as they have a contract from an Indian company for a project in India and have obtained the required approvals. In every other situation, an application must be presented to an AD Category-I bank in Form FNC along with the specified documents listed in the Form.
What options are available for registering a project office in India through investment Routes?
- Reserve bank Route: The main focus of a foreign company is subject to the requirement of having 100. There is permission for a certain percentage of Foreign Direct Investment (FDI).
- Route controlled by the Government: A foreign entity's main operations are subject to the requirement of 100 percent compliance. Foreign Direct Investment is prohibited. The RBI conducts assessments. applications from companies classified as Foreign Non- are being considered. Government Agencies/Charitable Organizations/Government. Government of India's Bodies/Department and Ministry of Finance.
What kinds of business structures exist for conducting business in India?
Those from other countries looking to establish their presence in India have the option to set up Foreign Representations such as a Liaison Office, Branch Office, or Project Office in the country. Moreover, a separate legal entity can be established, like a Wholly Owned Subsidiary, Joint Venture, or Limited Liability Partnership.
What are the situations in which non-resident companies have been authorized to set up a Project Office in India?
In the following situations, non-resident companies are allowed to establish project offices in India.
- A non-resident entity must obtain a contract from an Indian company to complete the project in India.
- The project needs to have obtained the required regulatory approvals.
- Financial support has been provided for the project.
- By receiving funds transferred from overseas; or
- The funding for the project comes from an International Financing Agency, whether it be bilateral or multilateral.
- A company or organization in India that is awarding the contract has received a Term Loan from a Public Financial Institution or a bank in India that is involved in the project.
How do you go about shutting down a Project Office?
Submission of requests for closure of the Project Office and remittance of winding-up proceeds to designated AD Category - I bank, along with the required documents, is necessary.
Are there any extra regulations that also apply to the Project Office?
Project offices must also acquire Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), Service tax Code, and any other necessary statutory registrations. Regular requirements consist of submitting TDS Returns, Service Tax Return, Income Tax returns, Annual Activity certificates, PF/ESI returns, etc. as necessary.
Who is required to turn in the Annual Activity Certificate?
The project office must provide the Annual Activity Certificate (AAC) by March 31 of each year to the designated AD Category -I bank, along with the necessary documents.
What are the key factors to keep in mind before applying for Project Office registration?
- Formal Communication regarding the Project
- Project approval
- Funding from overseas
- Financial support from India
Is it allowed for LO/BO to have multiple accounts in India?
No, if a LO/BO wants to open multiple accounts, it must first get approval from the Reserve Bank through its AD Category I bank, providing reasons for needing the extra account.
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