ESTABLISHING A PROJECT OFFICE IN INDIA
A Project Office (“PO”) refers to a place of business that is established in India to represent the interests of a foreign company executing a project. Such offices are prohibited from carrying on any activity other than those which relates to the execution of the project for which such office is established.
A foreign company can establish a PO in India either on a temporary basis or on permanent basis, provided that the foreign company has been assigned a project from the government or private sector to be executed by them in India.
The primary objective of a PO is to provide comprehensive support and effective governance to ensure the successful execution of specific projects. It serves as a central hub for all project-related activities, offering a structured and methodical approach to project management while facilitating the smooth implementation of the project. A PO is authorized to lease premises, recruit staff, and undertake project-specific endeavors.
Why India is a Suitable Location for a PO?
- Robust Economy
India is one of the fastest-growing economies, offering vast commercial opportunities and a diverse consumer market. Foreign businesses can tap into this growth potential, benefiting from India’s expanding economy.
- Skilled Workforce
With a large, talented workforce, India provides access to skilled professionals across various sectors. The cost-effectiveness and high quality of local talent make it an ideal location for executing projects efficiently.
- Infrastructure Development
The Indian government is investing heavily in infrastructure, from transportation to digital networks, creating opportunities for foreign companies to execute projects. This ongoing development enhances the business environment and ensures project success.
- Strategic Location
India’s strategic location in Asia, with excellent connectivity, facilitates easy access to both regional and global markets, making it an optimal base for Pos.
- Government Support
India offers various incentives for foreign investments, including tax benefits and reforms that simplify the business setup process, making it easier for companies to establish Pos.
Steps to set up a PO in India
- Documentation and Preparation:
To set up a PO in India, it is important to gather all the necessary documents. These include the Memorandum and Articles of Association of the foreign company, a board resolution or Power of Attorney that authorizes the establishment of the PO, a letter of intent from the foreign company, a copy of the project award document, the financial statements of the foreign company for the past three years, and a letter of reference from the foreign company’s banker.
- Application Submission:
To apply, fill the application form and send it to the designated Authorized Dealer Category-I bank. Along with the form, make sure to include all the necessary documents mentioned in Step 1. The AD Category-I bank will serve as a go-between for the PO and the Reserve Bank of India (“RBI”).
- Unique Identification Number (UIN) Allotment:
When applying for a PO, AD Category-I banks send an application to the General Manager of RBI to obtain a Unique Identification Number (UIN), which serves as a unique identifier for the PO.
- Approval Grant:
After receiving the application and accompanying documents, the AD Category-I bank will review and conduct due diligence. If the bank determines that all compliance requirements have been met, approval will be granted for setting up the PO in India. This approval will be issued in the form of an approval letter.
- E-Form Filing:
Within 30 days of establishing the PO, the company must electronically file a form with the RBI. The e-form provides essential details about the office’s operations.
- Bank Account Opening:
Once the approval letter is received, the PO must open a bank account with an AD Category-I bank to conduct financial transactions for its activities.
- Compliance with Applicable Laws:
After setting up the PO, it is important to comply with the various regulations and laws in India. This involves registering for professional tax, obtaining Goods and Services Tax (GST) registration, adhering to Employees’ State Insurance Corporation (ESIC) regulations, and following the provident fund laws, among other things. It is essential to comprehend and fulfill these legal and regulatory obligations to ensure the seamless functioning of the PO in India.
Document required for PO set up in India:
- Board resolution:A formal decision issued by the company’s board of directors approving and authorizing the establishment of a PO in India.
- Covering letter:An accompanying letter should explain the need for establishing a PO in India, along with any relevant information.
- Certificate of Incorporation: A certified copy of the company’s Certificate of Incorporation, proving its legal existence, issued by the appropriate registrar of companies.
- Project Office (PO) Application:The application for setting up a PO in India, including all required documents and forms, is submitted to the RBI.
- Memorandum of Association (MOA):The Memorandum of Association outlines the company’s goals, activities, and internal governance.
Form Part 1: A form must be filled out with basic company information, including name, address, and intended PO location in India.
Form Part 2 (Declaration): A form is required wherein authorized representatives of the company declare the accuracy, completeness, and compliance with laws and regulations of the provided information.
Applicant’s background details: Provide an overview of the company including its history, business type, stakeholders, and other relevant details.
Document for ROC registration
- List of Directors:A list of the directors’ names, addresses, and relevant details is needed to register the PO with the Registrar of Companies (“ROC”).
- List of Shareholders:A list of shareholders’ names, addresses, and shareholdings is necessary for ROC registration.
- Declaration u/s 380: A declaration, made under Section 380 of the Indian Companies Act 2013, by the company’s directors, stating that the establishment complies with all relevant laws and regulations.
How we may help?
Working with experienced professionals offers more than just ensuring legal compliance. Here is how we can assist you:
- Local Expertise & Network Access
Our in-depth knowledge of the Indian market allows us to connect you with valuable local contacts and networks, crucial for your project’s success.
- Navigating the Business Environment
India’s complex business regulations can be challenging to navigate. We can guide through these intricacies, ensuring our clients make informed decisions at every step of setting up and running a PO.
- Building Strategic Partnerships
We help in identifying and forming beneficial partnerships with local businesses and stakeholders, which can enhance the project’s long-term prospects in India’s dynamic market.
- Seamless Setup & Compliance
Our expertise ensures that your project office is set up efficiently, meeting all local legal and regulatory requirements, allowing you to focus on your core objectives without delays.
For more information or queries, please email us at
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