Liaison Office

A liaison office is generally used by a foreign company that wants a representative presence in India without undertaking direct commercial or revenue-generating activity. It is a limited-purpose structure that may support communication, market research, promotion, coordination, and representation of the foreign parent company.

A liaison office is not meant for trading, invoicing, selling, manufacturing, consulting revenue, or commercial execution in India. Its role is representative. This distinction is important because many foreign companies initially consider a liaison office for simplicity, but later discover that their actual business plan requires a subsidiary, branch office, or project office.

Who is this for?

• Foreign companies exploring the Indian market before committing
• Groups needing communication, coordination, or market research only
• Parents that do not yet intend to earn revenue in India

What it involves

The expenses of a liaison office are generally supported through inward remittances from the foreign parent through permitted banking channels. The office must remain within the approved scope of activity and maintain records to demonstrate that it has not crossed into commercial operations.

Eraqus Advisors helps clients evaluate whether a liaison office is suitable for their India objectives, activity restrictions, documentation, approval considerations, annual reporting, funding discipline, and compliance expectations.

Key considerations

• Strict activity restrictions, no trading, invoicing, or revenue in India
• Funding through inward remittances via permitted banking channels
• Records demonstrating the office stays within approved scope
• Annual reporting and compliance obligations
• Whether your real plan actually needs a subsidiary or branch office

Ongoing compliance

A liaison office can be useful when a foreign company wants to understand the Indian market, communicate with customers or partners, coordinate with local stakeholders, or establish a non-commercial representative base. It should not be used where the company intends to sell, invoice, execute contracts, or earn revenue in India.