Project Office Setup in India

A Project Office or Project Management Office in India is the ideal formation for companies looking to temporarily establish their business to execute a specific project. This is the ideal option when companies are required to complete a project within a specific period.

The Project Office acts as a central hub for the project activities and provides comprehensive support and effective governance for the successful execution of the project.

Stratrich Consulting has years of expertise navigating the intricacies of the Indian business environment, provide access to local knowledge and networking that will benefit your Project Office in India. Our proactive approach facilitates a streamlined office setup and allows you to easily tap into opportunities in the Indian market.

Why is India a Suitable Location for a Project Office?

India is considered a strategic location for businesses to capitalise on the stable economy, highly skilled workforce and favourable business environment. Companies can benefit from the following while setting up a Project Office in India:

  • Robust Economy: India’s economy is growing rapidly, offering numerous opportunities for business growth by utilising the vast and diverse consumer market.
  • Skilled Workforce: India has ample availability of skilled workforce, making it cost-effective to execute labour-intensive projects.
  • Infrastructure: The Indian government is focusing on infrastructure development, opening opportunities for foreign companies to execute various projects.
  • Favourable Business Environment: The Indian government promotes foreign investment and has created a more business-friendly environment to attract companies.

General Permission to set up a Project Office

Reserve Bank of India has given the general permission to foreign companies to establish Project Office in India, provided they have secured a contract from an Indian Company to execute a project in India under the following conditions:

  • The project is funded directly by inward remittance from abroad
  • The project is funded by a bilateral or multilateral International Financing Agency
  • The project has been cleared by an appropriate authority
  • The company or entity in India awarding the contract has been granted Term Loan by a PFI or a Bank in India for the project.

If the above criteria is not met, the foreign entity has to approach RBI Central Office in Mumbai for approval.

Advantages of Setting Up a Project Office in India

Registering a Project Office in India offers significant practical and strategic advantages.

Project Control

Project Office allows the company to manage the project directly from within the country, giving better control over resources, execution and quality.

Access to Local Resources

Project Office has access to local resources such as skilled labour, raw materials and local services, facilitating the smooth and cost-effective completion of the project.

Enhanced Credibility

Presence of a physical Project Office in India enhances business credibility and legal recognition. This builds trust and improves communication with partners and clients.

Tax Benefits

Tax benefits associated with operating a Project Office in India.

No Commitment

You can access the Indian market and get a taste of the business environment for a limited time, without the need to register a full-fledged company.

Low Compliance Burden

The compliance load is lighter and more project specific.

Our Comprehensive Services for Project Office Setup in India

We ensure that you operate your Project Office under the most favourable conditions and in compliance with Indian laws. We handhold you throughout the setup and project execution phase, avoiding any possible delays and confusion.

  1. Step 1: Initial Consultation

    We review your project to verify whether you are eligible to register a Project Office in India.

  2. Step 2: Documentation

    We help you with all necessary documents for Project Office setup, including:

    • The Memorandum and Articles of Association
    • The Board Resolution
    • Power of Attorney
    • Letter of Intent from the Foreign Company
    • Copy of the Project Award Document
    • Financial Statements of the Foreign Company for the Past Three Years
    • Letter of Reference from the Foreign Company's Banker

    We also help in getting the required documents notarised from the relevant authorities.

  3. Step 3: Application Submission

    We fill out the application form and submit it to the designated Authorised Dealer Category-I bank.

  4. Step 4: Coordinate with the Bank

    We follow up with the Authorised Dealer Bank to ensure swift RBI approvals and obtain a Unique Identification Number (UIN), which serves as a unique identifier for the project office. Once the approval letter is received, the Project Office must open a bank account to conduct financial transactions for its project activities.

  5. Step 5: File with RoC

    We take care of the MCA formalities and get your Project Office officially registered under the Companies Act.

  6. Step 6: Get your PO Tax Ready

    We handle the registration and paperwork of PAN, TAN, GST, so that your company is legally functional.

  7. Step 7: Ongoing Support

    We assist you with tax filings, audits, compliance and closure of the Project Office after completing the project.

Why Choose Stratrich?

  • Single point access for pre-incorporation and post-incorporation compliance
  • Experienced team of CA, CS and legal professionals
  • Complete handholding to foreign investors and NRIs
  • Provision for recruitment and market research on a need basis
  • Smooth and efficient registration process with quick turnaround time

Frequently Asked Questions (FAQs)

A Project Office serves as a place of business set up by a foreign entity to execute a specific project in India. It allows companies to have a temporary or, in some cases, a semi-permanent presence in the country solely for the purpose of completing a project.

Documents required for the Project Office set up in India are:

  • Board resolution: A formal decision issued by the company's board of directors approving and authorising the establishment of a Project Office in India.
  • Covering letter: An accompanying letter should explain the need for establishing a Project Office in India.
  • Certificate of Incorporation: A certified copy of the company's Certificate of Incorporation, proving its legal existence, issued by the appropriate registrar of companies.
  • Project Office (PO) Application: The application for setting up a Project Office in India, including all required documents and forms.
  • Memorandum of Association (MoA): This outlines the company's goals, activities, and internal governance.
  • Articles of Association (AoA): This establishes regulations for management, including shareholder and director rights and duties.
  • Form Part 1: A form must be filled out with basic company information, including name, address, and intended project office location in India.
  • Form Part 2 (Declaration): A form is required wherein authorised representatives of the company declare the accuracy, completeness, and compliance with laws and regulations of the provided information.
  • Applicant's background details: An overview of the company, including its history, business type, stakeholders, and other relevant details.

No

A Project Office lasts as long as the project lasts. There’s no provision for extension. For a new project, you’ll need a new Project Office or a more permanent structure like a branch.

Yes, you can open multiple Project Offices, but they should belong to different projects.

The setup process takes 3-6 weeks, depending on the documentation and approval timelines from the RBI and ROC.

The income earned by a Project Office is subject to corporate tax in India, which is generally around 40% (plus applicable surcharges and cess) for foreign companies.

Yes

No

  • Settle all dues—vendors, taxes, salaries, etc.
  • File your final returns and apply for a No Objection Certificate (NOC) from the Income Tax Department.
  • Submit closure filings with the RBI, the AD Bank, and the Registrar of Companies.

Approval of RBI for establishing Project Office is required in the following cases:

  • The applicant is a citizen of or is registered/incorporated in Pakistan.
  • The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a Branch Office in Jammu and Kashmir, North-East region or the Andaman and Nicobar Islands.
  • The principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting. However, prior approval of Reserve Bank of India shall not be required in cases where Government approval or license/permission by the concerned Ministry/Regulator has already been granted.
  • The applicant is a Non-Government Organisation (NGO), Non-Profit Organisation, Body/ Agency/ Department of a foreign government. However, if such entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), they shall obtain a certificate of registration under the said Act and shall not seek permission under FEMA 22(R).

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