Project Office Registration

Overview of Project Office Registration

A project office is a location of business where a foreign corporation carrying out a project in India can have its interests represented.

If the goal is to have a presence for a short time, one of the best ways for international enterprises to start up shop in India is to open a project office. It is effectively a branch office created with the express intent of carrying out a certain project.

Only with the Reserve Bank of India's approval may a foreign corporation establish a project office in India. In order to begin a project, international corporations must first sign a contract with an Indian company before establishing a project office in India. According to RBI recommendations and the Companies Act of 2013, a foreign firm that wants to open a project office in India must register with the Registrar of Companies (ROC) and follow specific procedural requirements.

Investment Entry Routes In India

There are different ways to make an investment in India. Here they are mentioned below:

Reserve Bank Route:

When a foreign company is eligible for main-line business with 100% Foreign Direct Investment (FDI), it can be permitted.

Government Route:

One of the areas where a foreign corporation is restricted from accepting 100% foreign direct investment is its core business. Applications from companies that fit within the categories of Foreign Non-Government Organizations, Non-Profit Organizations, Government Bodies, and Departments are evaluated in collaboration with the Reserve Bank of India, the Government of India, and the Ministry of Finance.

Requirement For Project Office In Delhi India

The necessity of an Indian project office is mentioned below:

• Formal Contract of the Project:

In order to support the project's financial statement and ensure that it is secured in India, it is crucial for a foreign company to have a documented and legally binding agreement.

• Clearance of the Project:

Check to see if the project has gotten the required permission from the appropriate authorities.

• Foreign Funding:

Make sure that the initiative receives financial assistance from the foreign country's inbound remittances; if not, the project needs to be sponsored by an international financing agency.

• Indian Funding:

It becomes the Indian entity's duty to secure the term loan from an Indian bank or public financial institution in the event that there is no international investment.

Documents Required For Project Office Registration in Delhi India

Documents Submitted to the RBI:

• Requirement of the incorporation certificate.
• Memorandum and articles of association certified by the Indian Embassy or a Notary Public in the nation where the registration was made.
• The applicant company's most recent audited balance sheet.
• A board decision from the foreign business outlining the rationale for opening the project office in India.
• Supporting documentation that demonstrates the Project Office's financial stability from bilateral or multilateral international financing agencies OR a term loan granted to the Indian company by an Indian bank or financing institution for the Project Office.
• The company's banker has submitted a report detailing the bank's relationship with the company.
• A letter of authorisation from the main business regarding the local agent.
• All information regarding the activities is carried out in the Indian project office.
• There should be proof of Residence for Licensed Personnel.
• A copy of the passport belonging to the designated personnel.
• A declaration stating that the business would create an Indian bank account.

Documents Submitted to the ROC:

• RBI has approved establishing a project office in India.
• MOA and AOA of the International Business.
• A notarized copy of the COI.
• A copy of a power of attorney that has been notarized, naming the person who resides in India and designating him as the person responsible for accepting any notices or documents on behalf of the company.
• Comprehensive information of the Directors of The Company.
•  Perform full KYC on all shareholders who own more than 10% of the applicant company's equity.

Project Office Registration Procedure in India

• Legalization of Documents:

All of the foreign company's documentation must be submitted to the RBI. A certificate of incorporation, the foreign company's MOA and AOA, and board resolutions are among the documents on the list. Furthermore, ensure that any documents pertaining to the authorized signatory of the foreign entity are legalized through the Indian Embassy or an apostille in accordance with the Hague Convention.

• Filing of Application with RBI Through AD Bank:

In FNC, a foreign firm files its parent office application. It is submitted through AD Bank (Authorized Dealer) to the Reserve Bank of India. Because all correspondence with the RBI is routed through the AD category-1 banks, they play a significant role. These banks help with opening non-interest-bearing foreign currency project office accounts in India. 

Every project office that is registered can open two foreign currency accounts, one in USD and the other account in their local currency in AD category-1 bank. The project sanctioning authority can debit the account for project-related expenses, while international financial agencies or foreign parent/group corporations can credit it for remittances. Moreover, AD Category-I bank is responsible for authorizing debits and credits in foreign currency accounts that are completely regulated under a concurrent auditor. Once the project is completed, the foreign currency accounts will be closed. 

• Verification of KYC from the Banker of the Parent Company:

 The banker of the overseas company receives a request for the review of documents. Swift-based verification is another name for this request for a verification method. For approval reasons, the application is preceded once the foreign banker confirms the paperwork. Depending on the situation, the RBI/AD may additionally request the other documentation.

• Approval of RBI For Project Office Registration in India:

The next stage after incorporation is to open a bank account for the business. Foreign direct investment must be made within 180 days of the company's formation, with prior notice given to the banker.

• Registration of Project Office Of Foreign Company With The ROC:

An application for the foreign company's project office registration is submitted within 30 days of the RBI's clearance for the creation of the project office in India. In order to electronically file statutory paperwork with the ROC, an authorized signatory must have a digital signature, and DIN is required for any Indian directors.

• PAN Card, Tax Deduction Number, and Bank Account Opening:

The PAN number is a unique ten-digit number that the Indian Income Tax Department issues. The branch office is able to open a bank account after obtaining the PAN. Additionally, in order to comply with all TDS regulations, each taxpayer must get a Tax Deduction Account Number.

• Other Registration and Licenses:

Following the Project Office's inactive status, various compliance-related operations are carried out depending on the type of business and the state-specific legislation that applies to all companies engaged in commercial activity. The Provident Funds Act, the Employee State Insurance Act (ESIC), the Professional Tax Act, and the Goods and Services Tax (GST) are a few examples.

The project registration office plays one of the most important roles in both project management and foreign direct investment. In project management, the Project Registration Office easily initiates project initiation, and they also make sure that aligning with organizational goals can enhance transparency and accountability. By centralizing project data and tracking, they empower better decision-making and performance measurement. In FDI, PROs provide a temporary and efficient way for foreign companies to execute projects in India, navigating regulations and reducing risks.