When Is Project Office Registration Required in India?

Setting up a business presence in India can be done in different ways depending on the nature of your operations. For foreign companies looking to execute specific projects in India without starting a full-fledged company, Project Office Registration is the right choice. But when exactly is this type of registration required, and how does it compare to other options like Liaison Office Registration, Sole Proprietorship Registration, or Indian Subsidiary Company Registration?

In this blog, Corpbiz explains everything you need to know about when project office registration is required in India, what the process involves, and how to make the right decision for your business needs.

What is a Project Office?

A Project Office (PO) is a temporary business setup by a foreign company in India to execute a specific project. This structure allows the foreign entity to operate in India only for the duration of the project. Once the project is completed, the office must be closed.

Unlike a Liaison Office, which cannot undertake commercial activities, a Project Office can carry out commercial operations, but only related to the project it is established for.

When is Project Office Registration Required?

Project Office registration becomes necessary in India under the following conditions:

1. Contract Awarded by Indian Entity

If a foreign company receives a contract from an Indian company or government body to execute a project in India, they may establish a Project Office.

2. Project Funded through Inward Remittance

If the project is funded through inward remittance from abroad or by a bilateral or multilateral funding agency, Project Office registration is needed.

3. Non-Branch Operation Requirement

If the company doesn’t want to set up a branch or subsidiary but still wants a local presence for a specific project, a Project Office is the right choice.

4. Project Duration is Temporary

If the project has a defined start and end date, and the company does not wish to continue operations after completion, this model is preferred.

Who Grants Approval?

The Reserve Bank of India (RBI) is the main authority for approving the establishment of Project Offices in India. In certain sectors, prior approval from the Ministry of Finance or other regulatory bodies may also be required.

Key Features of a Project Office

• Can carry out activities related to the assigned project only

• Cannot undertake unrelated commercial activities

• Is not a separate legal entity

• Operates as an extension of the foreign company

Project Office vs Liaison Office

Feature	Project Office	Liaison Office
Commercial Activities	Yes, project-specific	No
Remittance	Allowed	Not allowed
Regulatory Approval	RBI approval required	RBI approval required
Duration	Temporary (till project completion)	Long-term (non-commercial)

A Liaison Office Registration in India is meant for market research, promotion, or coordination activities, and cannot generate revenue. On the other hand, Project Offices can perform business transactions directly related to the project.

Project Office vs Indian Subsidiary Company

An Indian Subsidiary Company Registration involves forming a new legal entity that can carry out a range of business activities. It requires a more long-term commitment.

Feature	Project Office	Indian Subsidiary
Legal Entity	Not separate	Separate legal entity
Taxation	Taxed as a foreign company	Taxed as Indian company
Scope	Limited to project	Can do any lawful business
Duration	Temporary	Permanent

Project Office vs Sole Proprietorship Registration

A Sole Proprietorship Registration is not applicable to foreign companies. It is available only to Indian residents, making it unsuitable for a foreign business trying to enter India through a project.

Documents Required for Project Office Registration

• Board resolution from the parent company

• Copy of the project contract

• The latest financial statements of the parent company

• Letter of authority in favor of the Indian representative

• Certificate of incorporation of the foreign company

• KYC documents of the authorized signatory

• Details of the funding source

• Banker’s report from the foreign banker

Step-by-Step Process of Project Office Registration

1. Filing Application with AD Bank Submit the necessary documents to an Authorized Dealer (AD) Bank.

2. Forwarding to RBI The AD Bank forwards the application to the RBI for approval.

3. RBI Approval If all conditions are met, the RBI grants permission.

4. PAN and Bank Account Opening Obtain a PAN and open a project-specific bank account.

5. ROCB and Other Registrations Register with the Registrar of Companies (RoC) and complete necessary tax and labor law registrations.

Benefits of Registering a Project Office

• No need to set up a full company

• Easier compliance and taxation (compared to a subsidiary)

• Direct presence to manage and execute a project

• Allowed to repatriate surplus funds after project completion

Limitations

• Cannot carry out any activity not related to the project

• Temporary setup; cannot be converted to a branch or company

• RBI approval can take time

• Subject to FEMA and FDI norms

Corpbiz Expert Opinion

At Corpbiz, we help foreign companies choose the right entry strategy for India. Whether it's Project Office Registration, Liaison Office Registration, or Indian Subsidiary Company Registration, our team guides you from start to finish.

With RBI regulations, foreign exchange laws, and compliance requirements, it's crucial to have expert legal support to avoid delays and errors.

Frequently Asked Questions (FAQs)

Q1. Can a Project Office perform revenue-generating activities in India? 👉 Yes, but only related to the specific project for which it is established.

Q2. Is RBI approval mandatory for every Project Office setup? 👉 Yes, unless the foreign company meets certain automatic route conditions.

Q3. What is the validity of a Project Office in India? 👉 It is valid until the project is completed.

Q4. Can a foreign company set up a Sole Proprietorship in India? 👉 No, Sole Proprietorship Registration is available only to Indian citizens.

Q5. Can a Project Office be converted into a subsidiary company later? 👉 No, a Project Office is a temporary setup and cannot be converted. A separate registration for an Indian Subsidiary will be needed.

Conclusion

Project Office Registration is a perfect route for foreign companies that want to establish a presence in India temporarily to execute a specific project. It’s cost-effective, easier to manage, and does not involve forming a separate company. However, if your goals include long-term business or diversified operations in India, then Indian Subsidiary Company Registration is a more appropriate path.

Still unsure what’s right for your business? Let Corpbiz help you make the right decision. Our experts are ready to assist with everything—from evaluating your project needs to handling all registration and legal formalities.

About the Author: Atul Shukla

Atul Shukla is a seasoned legal and compliance expert at Corpbiz, specializing in foreign company registrations, regulatory approvals, and business structuring in India. With years of experience guiding international clients through RBI, FEMA, and corporate laws, Atul brings practical insights and simplified solutions to complex legal procedures. His goal is to make business entry and compliance in India smooth and hassle-free.