Liaison Office
One of the most common practices followed by the foreign companies for entering into the Indian Markets, is the setting up of a Liaison Office or Representative Office. Liaison Office is set up primarily for exploring and understanding the business and the investment climate in the country where it is established. A liaison office is not permitted to undertake any industrial or commercial activities directly or indirectly. As the liaison office is not involved in any business activity in India, it does not earn any income in India, and therefore pays no Income Tax in India. This office is maintained itself out of the inward remittances received from the parent company abroad, through the normal banking channels. Activities undertook by the Liaison Office include:
* Representing in India the parent Company / group Companies
* Promoting export/ import from/ to India
* Promoting technical / financial collaborations between the parent / group companies, and companies of India
* Acting as a communication channel between the parent company and the Indian companies
