Project Office registration in India

Project Office Registration
in India

A Purpose-Built India Presence for a Specific Contract

RBI General Permission — Quick Setup, Project-Bounded Operations

A Project Office is a temporary place of business that a foreign company can open in India to execute a specific contract awarded by an Indian customer. It exists for the life of the project and is wound up on completion. Project Offices are common for EPC contracts, turnkey infrastructure builds, plant erection and commissioning, and large equipment installations — engagements where the foreign company needs an on-the-ground presence to manage project execution, employ local staff for the project term, and procure goods and services in India, but does not intend to operate in India beyond the project.

Unlike a Liaison Office or Branch Office, a Project Office can be set up under RBI general permission (no individual RBI approval needed) provided the qualifying conditions are met. This page covers those conditions, the setup steps, ongoing reporting, taxation, and the closure / surplus repatriation process. If you are evaluating between a Project Office and a Branch Office for an extended India mandate, our pillar guide on Foreign Company Registration in India compares all four entry routes side by side.

RBI General Permission Conditions

RBI has granted general permission to foreign companies to open a Project Office in India without specific RBI approval, subject to all four of the following conditions being met:

  1. Secured contract: the foreign company has been awarded a contract from an Indian entity to execute a project in India.
  2. Source of funding: the project is funded by at least one of — (a) direct inward remittance from abroad; (b) a bilateral or multilateral International Financing Agency; (c) a term loan granted to the awarding Indian entity by an Indian Public Financial Institution or bank for the project; or (d) project cleared by an appropriate authority.
  3. Country eligibility: the foreign company is not from a country sharing a land border with India (or has obtained prior RBI approval if so).
  4. Sector: the project does not fall in a sector that is restricted or requires Government approval.

Where any of the above conditions is not met, prior RBI approval is required. We assess fit at the application-evaluation stage so there are no surprises later.

Setup Process — Step by Step
  1. Eligibility check: we confirm the four general-permission conditions and identify the AD Category-I Bank.
  2. AD Bank reporting: within two months of opening the Project Office in India, prescribed information is submitted to the AD Bank, including project details, contract, funding source, expected tenure, and parent company details.
  3. Unique Identification Number (UIN): AD Bank intimates RBI and arranges the UIN allotment.
  4. ROC registration: under Section 380 of the Companies Act 2013 within 30 days of establishment.
  5. PAN, TAN, GST, IEC (as applicable), opening of project bank account with the AD Bank.
  6. Initial accounting setup: books in India for the project, separate cost centres for tax and audit clarity.
Documents Required
  • Certificate of incorporation, MoA and AoA of the foreign parent (apostilled).
  • Audited financial statements of the parent for the last three years.
  • Copy of the contract / Letter of Award from the Indian customer.
  • Project funding evidence (inward remittance plan, sanction letter from PFI / bank, or government clearance).
  • Board resolution from the parent authorising the Project Office and nominating an Authorised Representative.
  • Passport copy and address proof of the Authorised Representative.
  • Proposed Project Office address proof (utility bill + NOC).
  • Project execution plan with timeline and resource estimate.
Taxation of a Project Office
  • Permanent Establishment: the Project Office constitutes a PE of the foreign parent in India under most DTAAs.
  • Income tax: taxed as a foreign company at 40% plus surcharge and 4% cess on net profits attributable to the project. Effective rate approximately 42–43.7%.
  • Tax audit (Form 3CD) applies above the turnover threshold; transfer pricing rules apply to any transaction with the parent or associated enterprise (Form 3CEB).
  • GST: registration mandatory if turnover crosses the threshold or any inter-state supply is made; reverse charge on imports of service.
  • DTAA optimisation: certain income categories (e.g., FTS, royalty, interest) may attract concessional rates under the applicable DTAA. We compute tax with and without DTAA benefit and adopt the better position with documentation.
Ongoing Compliance During the Project
  • Quarterly book-keeping and project P&L.
  • TDS deduction and quarterly e-TDS returns.
  • GST monthly / quarterly returns.
  • Annual income tax return + tax audit + transfer pricing audit.
  • Annual Activity Certificate to AD Bank.
  • ROC filings under Section 380/381 (Form FC-3, FC-4 as applicable).
  • Intimation of any inter-project fund movement.
  • FLA Annual Return to RBI by 15 July.
Closure and Surplus Repatriation

On completion of the project, the Project Office must be closed and any surplus remitted to the parent. Steps:

  1. Final audit of project accounts and final tax computation.
  2. Confirmation from the awarding Indian entity that all project obligations are discharged.
  3. Closure application to the AD Bank with audited financials, project completion certificate, and tax clearances.
  4. Form 15CA / 15CB for outward remittance of surplus to the parent.
  5. Surrender of UIN, PAN, TAN, GST and intimation to ROC of office closure.

Planning a project in India and unsure whether to set up a Project Office, Branch Office, or a full subsidiary? Talk to us first — the right vehicle decision at the bid / contract stage often saves five to seven percentage points of effective tax over the project life.