Project Office Registration in India: Complete Guide for Foreign Companies

Introduction

When a foreign company secures a contract in India, the most practical way to establish a temporary presence is through Project Office Registration in India. A project office (PO) allows a foreign entity to execute a specific contract locally under the framework of the Foreign Exchange Management Act (FEMA) and the Reserve Bank of India (RBI), routed via Authorized Dealer (AD) Category-I banks.

Unlike a subsidiary or branch office, a project office is not a separate legal entity—it exists solely for the duration of the project.

What is a Project Office?

A project office in India is a temporary establishment set up by a foreign company to fulfill contractual obligations tied to a specific project. Its operations are directly linked to the project lifecycle, and it closes once the project is completed. Unlike liaison offices, project offices are permitted to undertake activities necessary for executing the project.

Why Choose Project Office Registration in India?

• Purpose-built: Designed exclusively for delivering projects in India.
  
  

• Commercial scope: Permitted to earn income, but strictly from the awarded project.
  
  

• Limited tenure: Wound up automatically once the project ends, avoiding long-term overheads.
  
  

Eligibility Criteria for Project Office Registration in India

RBI permits project office registration if the foreign company has an Indian contract and meets at least one of the following conditions:

• Project funded through inward remittances from abroad.
  
  

• Funded by bilateral or multilateral international financing agencies.
  
  

• Approved by a competent authority in India.
  
  

• Supported by term loans from Indian banks or financial institutions extended to the awarding company.
  
  

Project Office vs Liaison Office vs Branch Office

• Liaison Office – Limited to communication and representation; cannot earn income.
  
  

• Branch Office – Broader operations and revenue generation but requires stronger financial credentials.
  
  

• Project Office – Restricted to one contract; revenue strictly from project activities; tenure ends when the project concludes.
  
  

Step-by-Step Process of Project Office Registration in India

1. Secure the Indian Contract

Obtain a duly signed contract or award letter specifying project scope, value, and timelines.

2. Apply via AD Category-I Bank (Form FNC)

Submit Form FNC with notarized/apostilled parent company documents, audited financials, the project contract, power of attorney, board resolution, and KYC documents. Approval is generally granted under RBI’s delegated powers.

3. Receive Approval and Establish the Project Office

Approval is typically valid for the project’s duration. The office must be set up within six months, and the AD bank should be notified once operations begin.

4. Register with MCA/ROC (Form FC-1)

Within 30 days of setup, file Form FC-1 with the Registrar of Companies, attaching the required documents and digital signature certificate.

5. Open a Dedicated Bank Account

Open the PO’s bank account with the same AD bank that granted approval. All project inflows must follow the approved funding structure.

6. Obtain Statutory Registrations

Apply for PAN, TAN, and GST (if applicable). Depending on the project, also register under Shops & Establishment, EPF, or ESI.

Documents Required for Project Office Registration in India

• Completed Form FNC.
  
  

• Notarized/apostilled Certificate of Incorporation and MOA/AOA of the parent company.
  
  

• Copy of the Indian project contract or award letter.
  
  

• Parent company’s audited financial statements (3–5 years) and banker’s report.
  
  

• Board resolution and power of attorney authorizing a representative in India.
  
  

Timelines

• AD Bank/RBI approval: 4–6 weeks
  
  

• ROC registration (Form FC-1): 2–3 weeks after office setup
  
  

• Bank account and tax registrations: 1–2 weeks (can be parallel)
  
  

Compliance After Project Office Registration

• Maintain proper books of accounts and get them audited annually.
  
  

• File annual returns and other MCA/ROC compliances for foreign companies.
  
  

• Ensure timely FEMA reporting and KYC updates with the AD bank.
  
  

• File taxes including TDS, GST (if applicable), and corporate tax returns.
  
  

Taxation of a Project Office in India

A project office is considered an extension of the foreign company. Income earned in India is taxable at foreign company rates. Repatriation of funds is permitted after taxes and liabilities are cleared. Companies should also assess MAT (Minimum Alternate Tax) and withholding tax implications.

Special Cases

• Projects in sensitive industries or locations may require prior RBI or government approval.
  
  

• Defence-related projects under the Ministry of Defence follow a special approval process.
  
  

• Entities from restricted countries may face additional scrutiny.
  
  

Conclusion

Project Office Registration in India is the most efficient route for foreign companies executing short-term, project-specific contracts. With clear eligibility criteria, a streamlined approval process, and defined compliance requirements, it ensures that companies can operate lawfully while keeping operations tied to the project’s scope and duration.

By planning documentation early, filing with MCA/ROC on time, and staying compliant with FEMA, RBI, and tax regulations, foreign entities can achieve smooth project execution and seamless closure.