Project Office Registration in India _ RBI & ROC Process

1. Project Office Registration in India | RBI & ROC Process Project office registration in India enables a foreign company to execute a specific awarded contract in India through a time‑bound presence, regulated under FEMA and RBI directions via the Authorized Dealer (AD) bank route. This article explains eligibility, approval pathways, documents, timelines, tax, and ongoing compliance to set up a compliant Project Office (PO). What is a Project Office A Project Office is a place of business established by a foreign company in India to undertake activities related to a specific project for a limited duration, typically co‑terminous with the project itself. It is distinct from a liaison office (no

2. commercial activity) and a branch office (broader scope), and must operate strictly within the awarded contract’s remit. Eligibility and automatic route General permission exists to open a PO when a foreign company has a valid contract with an Indian company and at least one of these conditions is met: funded by inward remittance; funded by a bilateral/multilateral international financing agency; project cleared by an appropriate authority; or the Indian project owner has a sanctioned term loan from an Indian bank/DFI for the project. In such cases, AD Category‑I banks can grant approval on RBI’s behalf. When prior RBI approval is needed Prior RBI approval is required when automatic route criteria are not met, or in sensitive cases like applicants from Pakistan or from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau and/or where the proposed office is in restricted locations; defense contracts awarded by the Ministry of Defence are exempt from additional approvals. Step‑by‑step registration process ● File Form FNC with an AD Category‑I Bank, attaching the contract and evidences to show eligibility under the general permission or seek specific RBI approval where required. ● After approval and establishment, report to the Registrar of Companies in Form FC‑1 within 30 days along with charter documents, list of directors, authorizations, and identity proofs of the authorised representative (AR). ● Within two months of establishment, submit the prescribed “PO establishment report” via the AD bank to the RBI regional office; thereafter, submit an annual CA‑certified project status and activity conformity report to the AD bank. Documentation essentials

3. ● Corporate: certificate of incorporation, charter/MOA, board resolution/POA authorizing the PO and Indian AR, list of directors and signatories. ● Project: copy of the Indian contract, details of awarding authority, contract value, tenure, and funding evidence (inward remittance/IFI funding/authority clearance/term loan sanction). ● Individual/KYC: passports and addresses of foreign directors and the Indian AR; legalization/apostille/consularization for foreign documents as per jurisdiction. Banking and operations ● Open a project office bank account with the chosen AD Category‑I bank; credit inflows should align with contract funding and permissible receipts, and outflows must relate to project expenses. ● BO/POs may acquire property for own use and permitted/incidental activities but cannot undertake activities outside the sanctioned scope. Timelines and validity ● Approvals under the automatic route typically conclude in a few weeks depending on bank/RBI scrutiny; the project office exists for the project tenure and must be closed within a reasonable time after completion. ● Approval letters may lapse if the PO is not set up within the specified period (often six months), requiring revalidation as per bank/RBI conditions. Taxation of a Project Office ● A Project Office generally constitutes a permanent establishment (PE) of the foreign company in India, making profits attributable to the project taxable at foreign company rates (base 40% plus surcharge and cess, subject to DTAA relief). Substance‑over‑form and control over Indian operations are key in PE analysis. ● MAT applicability can arise in specific cases; withholding tax, GST registration, TDS, and PAN/TAN are typical post‑setup tax actions aligned to the contract. Ongoing compliance ● Annual CA certificate to AD bank on project status and conformity; timely filings with MCA (e.g., FC‑1 on setup, event‑based forms), and closures via FC‑2 on exit.

4. ● Maintain books of account, get audits as applicable, adhere to FCRA/sectoral caps if relevant, and ensure all foreign document legalizations remain current. Closure and remittance ● On project completion, apply for closure with the AD bank, remit surplus balances after settling liabilities and taxes, and file the prescribed closure/intimation with MCA/RBI. ● Ensure tax clearances and CA certificates for remittance of balances and repatriation of assets as per FEMA and tax rules. Why engage specialists ● Expert handling accelerates eligibility assessment, documentation, FNC filing, AD bank interfacing, and coordination across RBI, MCA, and tax authorities. ● Proactive PE/tax planning, GST/TDS setup, and on‑time reporting avoid penalties and delays, keeping the project on schedule and compliant.