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Project Office Registration in India
The only India office a foreign company can open without proving its own net worth or profit history. What it needs instead is a signed contract, and funding that satisfies one of four tests.
- No net worth or profit track record test
- General permission where the funding test is met
FEMA 22(R)/2016General permission route
- 45+years of cross-border advisory
- 4funding tests for general permission
- 3jurisdictions: India, UAE, Singapore
- 2foreign currency accounts permitted
Quick Answer
How does a foreign company register a project office in India?
A foreign company that has secured a contract from an Indian party to execute a project in India can open a project office under general permission, provided the project meets one of four funding or clearance tests. There is no net worth or profit requirement. The office is reported to the Authorised Dealer bank and registered with the Registrar of Companies.
What separates a project office from the other two
- The qualification is a signed contract, not the parent's balance sheet. No net worth threshold and no profit track record apply.
- General permission depends on how the project is funded, not on who the parent is.
- The office exists for one project and its permitted activity is that project and nothing else.
- It may open up to two foreign currency accounts with the designated Authorised Dealer bank, which branch and liaison offices cannot.
- Surplus can be remitted during the project, not only at the end, on a chartered accountant's certificate.
- Its life is the life of the project. Completion triggers closure, not renewal.
Project office setup in India is the right answer for a defined, contracted piece of work with an end date. For an ongoing commercial presence, see branch and liaison office registration, and for a permanent operating entity see wholly owned subsidiary registration.
Structures Compared
What a project office is, and when it fits
A project office for a foreign company is a place of business established in India to execute a specific project the company has been awarded. It is the foreign company operating in India, not a separate Indian entity, and its existence is tied to the contract that justified it. Foreign project office registration therefore starts with the contract, not with the applicant.
| Project office | Branch office | Liaison office | |
|---|---|---|---|
| What qualifies the applicant | A contract awarded by an Indian party, plus a funding test | Parent net worth of USD 100,000 and five profitable years | Parent net worth of USD 50,000 and three profitable years |
| Net worth test | None | USD 100,000 | USD 50,000 |
| Profit track record | None | Five years | Three years |
| Scope of activity | The awarded project only | A defined list of commercial activities | Representation only, no income |
| Can it earn income in India | Yes, under the contract | Yes | No |
| Duration | The tenure of the project | No fixed expiry | Three years, extendable by three |
| Foreign currency account | Permitted, up to two accounts | Not generally permitted | Not generally permitted |
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When a project office is the right structure
A project office for foreign companies delivering contracted work suits a defined scope with an end date, awarded by an Indian customer, where the foreign company needs a presence in India to deliver it. Infrastructure, turnkey engineering, EPC contracts, plant erection and commissioning, and large system implementations are the typical cases.
It is also the practical answer where the parent cannot clear the branch office eligibility tests, since neither net worth nor profit history is examined.
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When it is not
Where the intention is to win further Indian work and build a continuing presence, a project office is the wrong shape. Each additional project has historically needed its own office and its own reporting, and the office cannot pursue business outside the contract that justified it.
Groups that expect a second and third Indian contract should price a branch office or a subsidiary at the outset rather than opening a series of project offices.
Funding Tests
The four tests for general permission
Where a foreign company has secured a contract from an Indian party, general permission is available without approaching the Reserve Bank, provided the project satisfies any one of four conditions. They are alternatives, not cumulative. Establishing which one applies is the first piece of work on any project office instruction.
- 01
The project is funded directly by inward remittance from abroad
The foreign company brings the money in itself through banking channels. This is the most common route and the easiest to evidence, since the remittance advice is the proof.
- 02
The project is funded by a bilateral or multilateral international financing agency
Development bank funded infrastructure work sits here. The funding agreement is the evidence.
- 03
The project has been cleared by an appropriate authority
Clearance from the relevant government or regulatory authority for the project itself. Common on public infrastructure and utilities work.
- 04
The Indian party awarding the contract has a term loan from a public financial institution or a bank in India
The qualifying condition sits with the customer, not the applicant. This test is regularly overlooked, and it rescues applications where the first three do not apply. It requires the Indian awarding party to confirm the facility, which is a commercial conversation worth having early.
If none of the four applies
The application goes to the Reserve Bank for approval rather than proceeding under general permission. That is not a refusal, but it changes the timetable materially and it should be identified before the contract commits the foreign company to a mobilisation date.
In practice, test four is the one that most often turns an approval case into a general permission case. Ask the Indian customer how the project is financed before assuming the answer.
Send us the contract and the funding structure. We will tell you which test applies.
Check the funding testRBI Approval
When prior RBI approval is required
General permission is displaced in a defined set of cases. Where any of these applies, the Authorised Dealer bank forwards the application to the Reserve Bank rather than processing it.
- The funding test is not met. None of the four conditions above applies to the project.
- Applicants from Pakistan. A citizen of, or an entity registered or incorporated in, Pakistan requires prior Reserve Bank approval for any office in India.
- Certain nationalities, for offices in sensitive locations. Applicants who are citizens of, or registered in, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau require prior approval where the office is proposed in Jammu and Kashmir, the North East region, or the Andaman and Nicobar Islands.
- Restricted sectors. Defence, telecom, private security, and information and broadcasting. There is a narrow exception for a project office relating to the defence sector where the contract has been awarded by a defence ministry, in which case no separate government reference is required.
- Non-profits and government bodies. Non-governmental organisations, non-profit organisations, and any body, agency or department of a foreign government.
A point on which published guidance disagrees
Regulation 5 of the 2016 regulations, read on its face, ties the requirement for applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong and Macau to offices proposed in Jammu and Kashmir, the North East region and the Andaman and Nicobar Islands. A great deal of published commentary states instead that applicants from those jurisdictions need Reserve Bank approval for an office anywhere in India, and several advisers apply the broader reading in practice.
The difference is roughly six weeks against roughly five months, so it is not academic. Where the parent has ownership traced to any of those jurisdictions, confirm the position with the intended Authorised Dealer bank before building a timetable on it. Banks apply their own risk policy on top of the regulation, and a bank that will not process the application is a practical constraint whatever the regulation says.
Permitted Activities
What a project office may do
The scope is the narrowest of the three offices and the easiest to state: the project office may carry out the project it was established for. It may not do anything else.
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Within scope
- Executing the awarded contract, including site work, supervision, erection and commissioning
- Employing staff in India for the project
- Receiving contract payments from the Indian awarding party
- Importing plant, equipment and materials for the project
- Sub-contracting parts of the project work, where the head contract permits it
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Outside scope
- Any commercial activity unrelated to the project
- Bidding for or executing a second contract through the same office, without separate reporting or approval
- Trading, retail or manufacturing beyond what the project requires
- Continuing in existence after the project is complete
Transferring funds between one project office and another requires prior permission from the relevant Reserve Bank Regional Office. The offices are treated as separate even where the parent is the same.
Setup & Registration
Setting up and reporting the office
Under general permission there is no approval to wait for, which makes project office registration in India materially faster than a branch. What replaces the approval is a reporting obligation, and two separate registrations.
Confirm the contract and the funding test
The signed contract with the Indian party, and evidence of whichever of the four funding conditions is relied on. Where test four applies, written confirmation from the awarding party about its term loan facility.
Appoint the Authorised Dealer Category-I bank
The bank that will hold the accounts, receive the reporting and certify remittances. Where foreign currency accounts are wanted, both must sit with the same bank, so this choice is made once.
Assemble and apostille the parent's documents
Certificate of incorporation, charter documents, board resolution authorising the project office and appointing the authorised representative, latest audited accounts, and a power of attorney. All executed outside India and authenticated by apostille or consular legalisation.
Report the office to the AD bank and the RBI Regional Office
Reporting the name and address of the foreign company, the contract reference and the awarding authority, the total contract value, the location and tenure of the office, a description of the project, the account details, and an undertaking that the office is eligible for general permission. Confirm the current reporting window with the AD bank before relying on a date.
Register with the Registrar of Companies
Form FC-1 under Section 380 of the Companies Act, 2013. A project office is a place of business of a foreign company like any other, and this obligation is frequently missed because the office is thought of as temporary.
PAN, TAN, accounts and registrations
PAN and TAN, the rupee account and any foreign currency accounts, GST registration, Import Export Code where equipment is being imported, and the labour registrations that follow the first hire.
Bank Accounts
Bank accounts, including foreign currency
This is where a project office has a genuine structural advantage over a branch or liaison office. It can hold foreign currency, which matters when the contract is priced in dollars and the equipment is bought abroad.
| Rule | Detail |
|---|---|
| Number of accounts | Up to two foreign currency accounts, typically one in US dollars and one in the home currency of the parent, where the project justifies both. |
| Same bank | Both accounts must be maintained with the same Authorised Dealer Category-I bank, which is why the bank is chosen before the accounts are opened. |
| What may be credited | Foreign currency receipts from the project sanctioning authority, and remittances received from the parent or group company. Not general receipts. |
| Audit | The accounts are subject to one hundred percent concurrent audit by the bank's auditors. |
| Closure | The foreign currency accounts must be closed on completion of the project. |
| Rupee account | Held alongside, for domestic receipts and payments including payroll and local procurement. |
Get the account structure right at the start
On a dollar-priced EPC contract with imported equipment, running everything through a single rupee account converts currency twice and exposes the margin to exchange movement across a multi-year project. That is a commercial cost, not a compliance one, and it is decided in the first fortnight when the bank is appointed.
Remittance
Remitting surplus during and after the project
A project office does not have to wait until completion to move money to the parent. Intermittent remittance is permitted, and on a long project that materially improves the cash position. It is conditional, and the conditions are the point.
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During the project
Intermittent remittance of surplus is permitted on production of:
- A certificate from the auditors or a chartered accountant confirming that sufficient provision has been made for all Indian liabilities, income tax included
- An undertaking that the remittance will not affect the completion of the project
- A commitment that any shortfall of funds will be met by inward remittance from abroad
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On completion
The surplus remaining after all Indian liabilities have been met is remitted through the designated bank, supported by:
- Audited accounts for the project
- An auditor's certificate on the manner of arriving at the remittable surplus
- Income tax clearance confirming no assessment is pending and no tax outstanding
The provision that gets underestimated
The certificate turns on adequate provision for Indian liabilities, and the largest of those is usually tax on profit attributed to the permanent establishment, which is frequently disputed. A remittance made against an optimistic provision leaves the parent funding an assessment years later, after the project team has demobilised and the contract margin has been booked.
Annual Compliance
Annual compliance for a project office
Lighter than a branch office in some respects, because there is no permanent establishment to maintain beyond the project, but the annual certificate and the Companies Act filings both apply.
| Obligation | Timing | Authority |
|---|---|---|
| Annual certificate from a chartered accountant | Annually to the AD branch | Confirming the accounts have been audited and that the activity was in conformity with the terms on which the office was established. |
| Form FC-3, annual accounts | Within 6 months of the financial year end | Registrar of Companies, under Section 381, with the audited accounts and a list of every place of business in India. |
| Form FC-2 | Within 30 days of any change | Registrar of Companies, for alterations to the parent's charter, registered office, directors or the authorised representative. |
| Statutory audit | Annual | Indian auditor appointed for the office. |
| Income tax return | Annual | Income Tax Department. |
| Transfer pricing certification | Where there are dealings with the parent or group | Form 3CEB. Common on project offices, because equipment and services usually come from the group. |
| Withholding tax returns | Quarterly | On payroll, sub-contractor payments and rent. |
| GST returns | Monthly or quarterly | Where registered. |
Taxation
Tax: the part that decides whether the project makes money
A project office is a permanent establishment of the foreign company. The rate is straightforward. What is not straightforward, and what determines the outcome on most large contracts, is how much of the contract value is attributed to it.
| Point | Position |
|---|---|
| Rate | The foreign company rate of 35 percent, plus surcharge and cess, on income attributable to the project office. Reduced from 40 percent by the 2024 amendments. |
| No second layer | Surplus is remitted to the parent without a further distribution tax. |
| What is taxable | Profit attributable to the permanent establishment, computed under Indian law. Head office expenditure is deductible only within the statutory limit. |
| Transfer pricing | Applies to equipment, services and personnel provided by the parent or group. Form 3CEB certification required. |
| Withholding on contract receipts | The Indian awarding party will deduct tax at source on payments. Obtaining a lower or nil deduction certificate where the eventual liability is lower is worth doing early, because recovering excess deduction through a refund takes years. |
| Treaty relief | Available under the applicable double taxation avoidance agreement, supported by a tax residency certificate and Form 10F. |
The composite contract problem
Large infrastructure and EPC contracts usually bundle offshore supply of equipment, offshore design, onshore services and onshore construction into a single price. How that price is split between what is taxable in India and what is not has been litigated for decades and remains one of the most contested areas in Indian international tax.
The split is far easier to defend when it is built into the contract as separately priced scopes with genuine commercial substance behind each, than when it is asserted afterwards in an assessment. That drafting happens before the contract is signed, which is usually before anyone has thought about the project office at all. Where a foreign contractor is bidding Indian work, the tax structuring conversation belongs at bid stage.
Pending Reform
The 2025 draft regulations would change project offices most Pending
The draft Foreign Exchange Management (Establishment in India of a branch or office) Regulations, 2025 were issued for consultation on 3 October 2025 and had not been notified when this page was last reviewed. Of the three office types, the project office would gain the most from them.
| Area | Position today | Proposed |
|---|---|---|
| One office per project | Each project requires its own office, its own reporting and its own accounts. | A single project office able to handle multiple projects, with separate books maintained per project and consolidated banking. |
| Inter-project transfers | Prior permission from the Reserve Bank Regional Office. | Simplified under consolidated banking arrangements. |
| Conversion | No mechanism to convert a project office into a branch. | Existing offices could be converted into branch offices. |
| Additional offices | Prior approval and a fresh document set. | Intimation to the designated bank. |
| Appeals | No formal mechanism against refusal. | A formal appeal process. |
| Annual reporting | Separate certificate per office. | Consolidated annual compliance reporting for multi-location entities, with transaction restrictions for non-submission. |
What to do with this now
A contractor with one Indian project in hand should proceed under the current framework. General permission is available today and waiting achieves nothing.
A contractor expecting several Indian projects over the next few years faces a genuine choice: open a project office per contract under the present rules, or establish a branch office or subsidiary now and avoid the multiplication entirely. The proposed single-office reform would remove much of the argument for the second option, but a draft issued for consultation carries no commitment as to when, or whether, it is notified in its current form. Structure for the rules that exist.
Multiple Indian projects in the pipeline?
Talk to the India entry teamCommon Pitfalls
Where project office setups go wrong
Four patterns, and every one of them is decided before the office opens.
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The office is set up after mobilisation
Site work starts on the contractual date, and the office paperwork follows. By then the foreign company has employees in India, is paying local suppliers and has taken delivery of equipment, with no registered place of business, no PAN and no compliant payroll. Unwinding that is more expensive than doing it in order, and the Form FC-1 clock has already run.
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The funding test was never actually established
General permission is assumed because the project is large and the customer reputable. Neither is a test. When the bank asks which of the four conditions is relied on and no answer is available, the file becomes a Reserve Bank approval case with a mobilisation date already contractually committed.
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Form FC-1 is skipped because the office is temporary
A project office is a place of business of a foreign company and Section 380 applies to it in the same way as to a branch. The 30-day window runs regardless of how long the project is expected to last. This is the single most commonly missed filing on project offices.
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The composite contract was priced before anyone considered attribution
A single lump sum covering offshore supply and onshore work, agreed at bid stage, leaves the split to be argued with an assessing officer years later. The margin assumed at bid can disappear into an attribution dispute, and by then the contract cannot be re-priced.
Closure
Closing the project office
A project office is expected to close. Completion is not an event that happens to it, it is the end of its permitted existence, and the closure is a regulated process that should be planned into the project programme rather than discovered at the end of it.
| Step | What is involved |
|---|---|
| Final accounts | Audited accounts for the project, showing all Indian liabilities settled or provided for. |
| Tax clearance | Confirmation from the Income Tax Department that no assessment is pending and no tax is outstanding. Usually the longest step, and the reason closure should start before demobilisation. |
| Application to the AD bank | With the auditor's certificate on the manner of arriving at the remittable surplus and confirmation that liabilities have been met. |
| Close the foreign currency accounts | Required on completion of the project. |
| Registrar filing | Notice of closure of the place of business, so the FC-1 registration is closed rather than left open with continuing filing obligations. |
| Remit the surplus | Through the designated bank once clearances are in place. |
| Surrender registrations | GST, PAN, TAN and labour registrations, in the correct order and after the final returns. |
Start the closure before the team leaves
Tax clearance requires people who can answer questions about the project, and records that are accessible. Both become scarce once the site team has demobilised and the project accountant has moved to the next contract. A closure begun six months after practical completion routinely takes twice as long as one begun at completion.
Why IMC
How IMC handles a project office
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What the engagement covers
Assessment of the funding test and whether general permission is available. Review of the contract for attribution and withholding exposure, ideally at bid stage. AD bank selection and account structure, including foreign currency accounts. Apostille coordination. Reporting to the bank and the Reserve Bank Regional Office. Form FC-1 registration. PAN, TAN, GST and Import Export Code. Then the annual certificate, FC-3, tax filings, intermittent remittance certification, and the closure at completion.
Where a group expects several Indian contracts, we price the branch office and subsidiary alternatives alongside, rather than defaulting to a project office per contract.
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Credentials
Established in 1979. Offices in India, UAE and Singapore. 150+ professionals. India, UAE and Singapore are run as a single corridor practice rather than three unconnected offices.
What to have ready before the first call
The contract or the draft, the identity of the Indian awarding party and how the project is financed, the parent's country of incorporation and ownership chain, the expected project duration, and whether equipment will be supplied from outside India. Those five answers determine the funding test, the approval route and the tax exposure.
Meet The Team
Experts behind this service
The people who will actually run your project office registration, end to end.
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Shriya Mandal
Director - Compliance
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Deepakshi Sukhwani
Senior Associate - Corporate Services
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Mudita Gehlot
Senior Associate - Corporate Services
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Poornima J
Director - Strategy & Operations
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Ninad Parkar
Director - Strategic Partnerships & Business Development
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Aishwarya Shiva
Director - Strategic Partnerships & Business Development
FAQs
A place of business established in India by a foreign company to execute a specific project it has been awarded by an Indian party. It is the foreign company operating in India rather than a separate Indian entity, its permitted activity is that project alone, and its life is the tenure of the project.
Not where general permission applies. A foreign company with a contract from an Indian party can open a project office without prior Reserve Bank approval if the project meets one of four funding or clearance tests. Approval is needed where none of the four applies, or where the applicant or sector falls into a restricted category.
Any one of four alternatives: the project is funded directly by inward remittance from abroad, or by a bilateral or multilateral international financing agency, or it has been cleared by an appropriate authority, or the Indian party awarding the contract has been granted a term loan by a public financial institution or a bank in India.
No. Unlike a branch office, which requires parent net worth of USD 100,000 and five profitable years, or a liaison office at USD 50,000 and three years, a project office has no net worth or profit track record test. The qualification is the contract and the funding position, not the parent’s balance sheet.
Where general permission applies there is no approval to wait for, so the timetable is driven by document apostille and bank onboarding rather than by a regulator. Where the file must go to the Reserve Bank, allow several months. Establish which applies before committing to a mobilisation date.
Yes. Up to two foreign currency accounts may be held with the designated Authorised Dealer Category-I bank, both with the same bank. Credits are limited to foreign currency receipts from the project sanctioning authority and remittances from the parent or group. The accounts are concurrently audited and must be closed on completion.
Yes. Intermittent remittance of surplus is permitted on a certificate from the auditors or a chartered accountant confirming adequate provision for all Indian liabilities including income tax, an undertaking that the remittance will not affect project completion, and a commitment to meet any shortfall by inward remittance.
Yes. A project office is a place of business of a foreign company, so Form FC-1 must be filed with the Registrar of Companies within 30 days of establishing it, under Section 380 of the Companies Act, 2013. This is the most commonly missed filing, because the office is thought of as temporary.
Not under the current framework. Each project requires its own office and its own reporting, and transferring funds between project offices needs prior permission from the Reserve Bank Regional Office. The draft 2025 regulations propose allowing a single office to handle multiple projects, but they have not been notified.
As a permanent establishment of the foreign company, at the foreign company rate of 35 percent plus surcharge and cess on profit attributable to it. There is no second layer on remittance. On composite contracts, how much of the contract value is attributed to the Indian permanent establishment is the decisive and most disputed question.
Before you mobilise
Send the contract or the draft, the identity of the Indian awarding party, how the project is financed and the expected duration. We will confirm whether general permission is available, what the reporting obligations are, and where the attribution exposure sits.
Response within one working day. Initial eligibility view at no cost.
IMC