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    Project Office

    Project Office means a place of business in India to represent the interests of the foreign company executing a project in India It cannot undertake any additional activity except the activities relating or incidental to the execution of the project.  

    • Set up to represent interest of foreign company executing a project in India
    • Can only undertake activities incidental to execution of project
    • Funding to be directly met by head office
    • Validity period is tenure of the project
    • Profits earned are freely remittable from India



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    Pay and submit documents online

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    Overview


    The set up and regulation of Project Office are governed by Foreign Exchange Management Act, 1999 and the Regulations issued by Reserve Bank of India from time to time. Project Office are generally set up by foreign entities to execute an awarded project by the Indian Companies. RBI allow foreign entities to establish project offices in India, provided they have secured a contract from an Indian company to execute a project in India.

    General Conditions for setting up project office in India for a person resident outside India are given below:

    1. the project must have secured the necessary regulatory clearances; and
    2. the project is funded directly by inward remittance from abroad; or
    3. the project is funded by a bilateral or multilateral International Financing Agency; or
    4. A company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

    The applications for establishment of Project Office in a sector in which 100% FDI is allowed are routed through designated AD Category I Bank. The application are submitted to AD Category-I bank in Form FNC along with the prescribed documents mentioned in the Form, as per the guidelines issued by the Reserve Bank of India.

    PO can approach AD Category I Bank in India to open a Non Interest Bearing Foreign Currency Account for its operations in India subject to certain conditions. The permissible credits in bank account shall be foreign currency receipts from the Project Sanctioning Authority and remittances from parent/ group company abroad or bilateral/ multilateral international financing agency. While the permissible debits shall be payment of project related expenditure.

    Features


    • Permissible Activities

      Project Office is just an extension of the foreign companies in India and cannot undertake any additional activity in India except the activities relating or incidental to the execution of the project.

    • Bank Account

      Any foreign entity (except an entity from Pakistan) who has been awarded a contract for a project by the Government authority/Public Sector Undertakings or are permitted by the AD to operate in India may open a bank account without any prior approval of the Reserve Bank. Each Project Office can open two foreign currency accounts, usually one denominated in USD and other in home currency of the project awardee, provided both are maintained with the same AD Category–I bank.

    • Remittance of Profit

      AD Bank can permit intermittent remittances by Project Office pending winding up/ completion of the project provided they are satisfied with the bonafides of the transaction subject to certain conditions

    • Extension of fund and non-fund based facilities

      AD Category I Bank may extend Fund/Non Fund facilities to Project Office on the basis of Board approved policy, business prudence and compliance to extant rules/regulations stipulated by DBR, RBI.

    • Closure of Project Office

      Requests for closure of Project Office and for remittance of winding-up proceeds needs to be submitted to designated AD Category - I bank along with prescribed documents.

    Things to Know


    Application for establishment of Project Office
    There is a general permission to non-resident companies to establish Project Office in India, provided they have secured a contract from an Indian company to execute a project in India and has also secured necessary clearances. In all other cases, the applications for establishment of Project Office in a sector in which 100% FDI is allowed are routed through designated AD Category I Bank. The application is required to be submitted to AD Category-I bank (AD Bank) in Form FNC along with the prescribed documents mentioned in the Form and the LOC (wherever applicable), as per the guidelines issued by the Reserve Bank of India.   An applicant that has received a permission for setting up of a Project Office shall inform the designated AD Bank as to the date on which the Project Office has been set up which shall not be later than 6 months from the date of the approval letter.    
    Permissible debits and credits from bank account
    The permissible credits in bank account shall be foreign currency receipts from the Project Sanctioning Authority and remittances from parent/ group company abroad or bilateral/ multilateral international financing agency. While the permissible debits to the account shall be payment of project related expenditure.  Validity period of Project Office The validity period of the Project Office is for the tenure of the project. Annual Activity Certificate
    Project Office are required to submit Annual Activity Certificate (AAC) as at the end of March 31 each year along with the prescribed documents to the designated AD Category -I bank as well as Director General of Income Tax (International Taxation), New Delhi.    
    Registration with Registrar of Companies
    A foreign company establishing a project office in India is required to file Form FC-1 with the Registrar of Companies within 30 days of the establishment of its place of business in India.    

    Document Required


      From Foreign Entity

    • Duly filled Form FNC;
    • Copy of the Certificate of Incorporation / Registration along with Memorandum of Association and Articles of Association attested by the Notary Public in the country of registration. [If the original Certificate is in a language other than in English, the same may be translated into English and notarized as above and cross verified/attested by the Indian Embassy/ Consulate in the home country];
    • Audited Balance sheet of the applicant company for the last five years [If the applicants’ home country laws/regulations do not insist on auditing of accounts, an Account Statement certified by a Certified Public Accountant (CPA) or any Registered Accounts Practitioner by any name, clearly showing the net worth may be submitted];
    • Bankers Report from the applicant’s banker in the host country / country of registration showing the number of years the applicant has had banking relations with that bank;
    • Power of Attorney in favour of signatory of Form FNC in case the Head of the overseas entity is not signing the Form FNC

    Why Companies Next


    At Companies Next, we have a dedicated team of professionals for providing quality services with accuracy and within given timelines. We provide a complete transparent and online platform for registration of your Project Office.  

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    FAQ's


    There is a general permission to non-resident companies to establish Project Office in India, provided they have secured a contract from an Indian company to execute a project in India and has also secured necessary clearances. In all other cases, an application to be submitted to AD Category-I bank in Form FNC along with the prescribed documents mentioned in the Form.
     
    The validity period of the Project Office is for the tenure of the project.
     
    Project office are required to submit Annual Activity Certificate (AAC) as at the end of March 31 each year along with the prescribed documents to the designated AD Category -I bank.
     
    Foreign Individuals seeking interest to start their operations in India can open a Foreign Representations in the form of Liaison Office, Branch Office and Project Office in India. Further, an incorporated entity can also be formed such as Wholly Owned Subsidiary, Joint Venture and Limited Liability Partnership.
     
    General permission for setting up project office in India for non-resident companies has been provided in the following cases:
    1. Non–resident entity must have secured a contract from an Indian company for execution of project in India; and
    2. the project must have secured the necessary regulatory clearances; and
    3. the project is funded:
    • directly by inward remittance from abroad; or
    • the project is funded by a bilateral or multilateral International Financing Agency; or
    • a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

    Approval of RBI for establishing Project Office is required in following cases:

    1. The applicant is a citizen of or is registered/incorporated in Pakistan;
    2. The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a Branch Office in Jammu and Kashmir, North East region and Andaman and Nicobar Islands;
    3. The principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting. However, prior approval of Reserve Bank of India shall not be required in cases where Government approval or license/permission by the concerned Ministry/Regulator has already been granted.
    4. The applicant is a Non-Government Organisation (NGO), Non-Profit Organisation, Body/ Agency/ Department of a foreign government. However, if such entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), they shall obtain a certificate of registration under the said Act and shall not seek permission under FEMA 22(R).
    Project office are also required to obtain Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), Service tax Code and other statutory registrations as may be applicable. Periodic compliances include TDS Return, Service Tax Return, Income Tax Return, Annual Activity Certificate, PF/ESI returns etc. as may be applicable.
     
     
    Requests for closure of Project Office and for remittance of winding-up proceeds needs to be submitted to designated AD Category - I bank along with prescribed documents.
     
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