India is emerging as one of the most promising destinations for global businesses. With growing infrastructure, a massive consumer base, and supportive government policies, many foreign companies are eager to tap into the Indian market. Among various modes of entry into India, Project Office Registration stands out as a preferred option for companies looking to execute specific contracts or large-scale assignments like green hydrogen plant setup, construction, or infrastructure development.

In this blog, we at Corpbiz will explain why foreign companies choose Project Offices to operate in India, how they compare with other business models such as Liaison Office, Indian Subsidiary, and Sole Proprietorship, and what steps are involved in setting up a Project Office.

What is a Project Office?

A Project Office is a temporary setup by a foreign company in India to execute a specific project awarded by an Indian company or government agency. It is ideal for companies engaged in sectors such as:

• Power and Energy (e.g., Green Hydrogen Plant Setup)
  
  

• Construction and Infrastructure
  
  

• Oil & Gas
  
  

• Heavy Engineering
  
  

• Telecom and Transportation
  
  

Unlike a Liaison Office, a Project Office is allowed to undertake commercial activities directly related to the execution of the project.

Why Choose a Project Office in India?

Here are the main reasons why foreign companies prefer the Project Office route:

1. Direct Project Execution

A Project Office allows a foreign entity to directly implement a contract in India without forming a full-fledged subsidiary. This is useful in sectors where large capital investments are required.

2. FEMA and RBI Compliant

The Reserve Bank of India (RBI) permits Project Office setup without prior approval if the foreign company has secured a contract from an Indian entity funded by:

• Inward remittance from abroad
  
  

• A bilateral or multilateral financing agency
  
  

• A term loan from public financial institutions or banks in India
  
  

This ease of setup under Foreign Exchange Management Act (FEMA) regulations makes it a go-to option.

3. Cost-Effective Model

Setting up a subsidiary can involve high compliance and ongoing costs. A Project Office, being temporary, reduces administrative burden and cost, making it a practical choice for time-bound assignments.

4. Limited Compliance Requirements

Compared to an Indian Subsidiary or Private Limited Company, a Project Office faces fewer regulatory burdens, tax filings, and operational complexities.

Project Office vs. Other Business Structures

While Liaison Office Registration in India is popular for non-commercial representation, a Project Office is the clear choice for the actual execution of large-scale projects.

Example: Green Hydrogen Plant Setup in India

As the Indian government promotes renewable energy through incentives and policy reforms, foreign energy companies are increasingly looking to set up green hydrogen plants. A Project Office becomes the most suitable model in such cases because:

• The project has a defined scope and timeline.
  
  

• Capital investment is high.
  
  

• The foreign company can operate under a single-window project-specific framework.
  
  

• Compliance is streamlined through RBI approval or automatic route.
  
  

Steps for Project Office Registration in India

Setting up a Project Office in India involves several steps. At Corpbiz, we make the process easy and compliant. Here's a quick overview:

1. Obtain RBI Approval (if required): In some cases, the setup falls under the automatic route; otherwise, prior RBI approval is needed.
   
   

2. Documentation: Submit key documents like the contract copy, board resolution, company profile, audited financial statements, etc.
   
   

3. PAN and TAN: Apply for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number).
   
   

4. Bank Account: Open a project-specific bank account in India.
   
   

5. Registrar of Companies (RoC) Filing: File with the Registrar for compliance under the Companies Act.
   
   

6. GST and Tax Registrations: If applicable, obtain GST registration and ensure all taxes are filed correctly.
   
   

Need help? Contact Corpbiz for end-to-end assistance in Project Office Registration!

Can Foreign Companies Choose Other Models?

Yes, foreign companies may also consider these options based on their business plans:

✅ Indian Subsidiary Company Registration

Ideal for long-term operations with the intention to establish a full presence. Requires incorporation of a Private Limited Company with at least one Indian director.

✅ Liaison Office

Suitable for promoting parent company interests, exploring the Indian market, or coordinating with Indian suppliers. No commercial activity allowed.

❌ Sole Proprietorship Registration

This model is not applicable for foreign companies, as it is reserved for Indian citizens or residents.

Documents Required for Project Office Setup

• Certificate of incorporation of the parent company
  
  

• Board resolution for setting up the office
  
  

• Letter of appointment for the Indian representative
  
  

• Power of attorney
  
  

• Detailed project contract
  
  

• Banker's report and financial statements
  
  

• Form FNC (for RBI filing)
  
  

FAQs on Project Office in India

Q1. Is prior approval from RBI always required for setting up a Project Office?
Ans: Not always. If the project is funded through specified means (inward remittance, bilateral agency, Indian financial institution), it qualifies under the automatic route.

Q2. Can a Project Office repatriate funds outside India?
Ans: Yes, after tax liabilities and project closure, surplus funds can be repatriated with RBI clearance.

Q3. How long can a Project Office operate in India?
Ans: Only till the completion of the project. After that, it must be closed following proper procedures.

Q4. Can one company set up multiple Project Offices in India?
Ans: Yes, but each office must be linked to a separate project.

Q5. Who can help with end-to-end Project Office registration in India?
Ans: Corpbiz offers full support – from documentation to RBI filing, compliance, and closure assistance.

Conclusion

A Project Office is an effective and flexible option for foreign companies looking to execute large-scale, time-bound projects in India. It offers cost efficiency, compliance simplicity, and allows direct involvement in commercial activity — something not allowed through Liaison Offices. Whether it’s a Green Hydrogen Plant Setup or a high-value infrastructure deal, Project Offices serve as the perfect entry point.

At Corpbiz, our legal experts ensure your Project Office Registration, Liaison Office Registration, or Indian Subsidiary Company Registration is smooth and compliant. Let us help you set up your foreign business in India successfully.

Author: Atul Shukla

Atul Shukla is a legal and business compliance expert at Corpbiz, specializing in foreign business setups, company registration, and regulatory approvals in India. With over 10 years of experience in handling Project Office Registration, NBFC licensing, and legal metrology compliance, he has helped numerous international companies establish their presence in India with ease. His passion lies in simplifying complex legal processes into actionable insights for entrepreneurs and global corporations alike.