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Comparison between Liaison office & Branch office

Foreign companies entering India can establish either a Liaison Office or a Branch Office, each serving distinct purposes under RBI regulations. A Liaison Office acts as a communication and networking channel without revenue-generating activities, while a Branch Office can undertake business operations and earn income in India. Choosing the right route is crucial for compliance and business goals. SKMC Global assists in evaluating the best option, securing approvals, and ensuring end-to-end compliance for a smooth India entry and sustainable growth.

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Comparison between Liaison office & Branch office

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  1. COMPARISON BETWEEN LIAISON OFFICE & BRANCH OFFICE Foreign companies entering India generally choose between a Liaison Office or a Branch Office, both regulated by the RBI under FEMA. A Liaison Office serves only for representation, networking, and research without income generation, while a Branch Office can conduct business operations and earn revenue. Understanding these differences is crucial for foreign businesses to select the right entry route that aligns with their objectives and compliance needs. PARTICULARS LIAISON OFFICE BRANCH OFFICE Acts between parent company and Indian entities. as a communication channel Permitted to carry out commercial activities of the parent company in India. Purpose Only research, generating activity. liaison, networking. promotion, market revenue- Can undertake business operations, generate revenue, and incur expenses in India. Nature of Activities No Not allowed to earn income in India. Expenses met by parent company remittances. Allowed permitted activities in India. to earn income from Income Generation Taxable in India on income earned (corporate tax rate applies). Taxation No taxation, as no income is generated. RBI and sometimes other authority approvals required depending on activities. Approvals Required RBI approval required for setup. Promotion products/services, stakeholders, research. of parent company’s Import/export, professional services, representing parent company. consultancy, Permitted Activities liaison with Cannot manufacturing, or revenue-generating activities. engage in trading, Cannot manufacturing, or activities restricted by RBI. undertake retail trading, Restrictions Entirely funded by parent company from abroad. Can be funded by parent company and also generate income locally. Funding At SKMC Global helps foreign companies evaluate whether a Liaison Office or Branch Office best suits their India entry strategy. From regulatory approvals to compliance and setup, we ensure smooth establishment and hassle-free operations. +91 989-125-5499 www.skmcglobal.com info@skmcglobal.com

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