I. Registration of Liaison Office

✅ Step 1: Eligibility Criteria

• Foreign parent company must have:
  • A profit-making track record during the immediately preceding three financial years in the home country.
  • A Net Worth of at least USD 50,000 (or equivalent).
• If these criteria are not met, a Letter of Comfort (LoC) from the parent company may be submitted.

✅ Step 2: Application Submission

• File Form FNC with the designated Authorised Dealer (AD) Category-I Bank for allotment of Unique Identification Number (UIN).

✅ Step 3: Document Preparation

Attach the following documents (notarized/apostilled where applicable):

• Certificate of Incorporation / Registration of the foreign entity
• Memorandum & Articles of Association (MoA & AoA)
• Audited Financial Statements for the last 3 years
• Banker’s report from the parent company’s banker
• Letter of Comfort (if applicable)
• Resolution/authorization for establishing LO

✅ Step 4: Approval Process

• The AD Bank processes the application under delegated powers.
• RBI approval is required for:
  • Entities from Pakistan
  • Activities in restricted sectors (defense, telecom, nuclear energy, private security, media, etc.)

✅ Step 5: Bank Account Opening

• Open a Rupee-denominated account with the designated AD Category-I Bank for operational expenses.
• All expenses must be met exclusively through inward remittances from the parent company.

✅ Step 6: Reporting to Authorities

• Register with State Police Authorities, if applicable (especially for entities from certain countries like Bangladesh, Pakistan, etc.).

✅ Step 7: Compliance Post-Approval

• Notify RBI and AD Bank about the commencement of operations within 6 months from approval date.

✅ Step 8: Operational & Annual Compliance

• Only permitted activities allowed:
  • Representing the parent company
  • Acting as a communication channel
• No commercial, trading, or industrial activity is permitted.
• Comply with:
  • Submission of Annual Activity Certificate (AAC) to the AD Bank
  • Regulations relating to change of office address, opening of additional bank accounts, or change in activities

✅ Step 9: Extension of Validity Period

• Submit extension request to the AD Category-I Bank before expiry.
• AD Bank may grant an extension up to 3 years, subject to:
  • Compliance with original approval
  • Satisfactory functioning of the LO

🔚 II. Closure of Liaison Office

✅ Step 10: Closure & Winding-Up Process

Submit request to AD Category-I Bank with:

• Copy of RBI approval letter for LO setup
• Auditor’s Certificate confirming:
  • Computation and basis of remittable amount
  • Disposal of assets
  • All liabilities (gratuity, staff dues, taxes, etc.) have been met or provided for
  • No income from Indian sources remains unrepatriated
• Confirmation from parent company that:
  • No legal proceedings are pending in India
  • There are no legal impediments to the remittance
• Compliance certificate/report from:
  • Registrar of Companies (RoC) under Companies Act, 2013
  • Sectoral regulator, if applicable (e.g., IRDAI, SEBI)
• Proof that Annual Activity Certificates (AACs) have been duly filed