‘Project Office’ refers to a business place which represents the interest of foreign company undertaking a project in India.
Project office of a foreign company can be set up in India only after obtaining the permission from Reserve Bank of India. Before setting up project office in India, foreign companies must have entered into contract with an Indian company to start a project, further
- The project should be funded by International Financing Agency;
- The project should be cleared by an appropriate authority;
- Funding of project should be done by inward remittance from abroad;
However, if the above conditions are not satisfied or the parent entity is set up in Pakistan, Bangladesh, Iran, Sri Lanka, Afghanistan, China, Hong Kong or Macau, then for the purpose of approval such application are send to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India.
Important points to be noted
- Proprietary concerns which are established abroad are not allowed to start a project office in India.
- A foreign entity’s project office is allowed for the acquisition of any property for carrying out activities which are permitted by Reserve Bank of India or for their own use.
- Only non-interest bearing current accounts can be maintained by a project office in India.
- If at the time of setting up of project office in India, approval from Reserve Bank is not obtained then it is necessary to inform about the project office to Registrar of Companies in the prescribed form to inform about the set up of project office with all important documents within the time specified.
Post setting-up compliance
- Within 5 working days when the operations of the entity are undertaken, a report is sent to Director General of Police.
- For the purpose of submission, Annual Activity Certificate has to be obtained from auditor and it is submitted to RBI through AD bank and Director General of Police of the state on yearly basis.
- Report is to be furnished by foreign entity’s project office to the concerned regional office of RBI carrying the following details:
- Full name and complete address of foreign company,
- Date on which the contract is signed.
- Address, e-mail address, telephone number and other details about the project office.
- Time period of the project office.
- Details regarding the project.
- Details of the authority who awarded the project
Within 2 months of establishment, the project office has to submit this report to the concerned regional office of the Reserve Bank of India.
