What are the requirements for setting up a project office in India?

If a foreign company has secured a contract from an Indian company to execute a project in India and has attained the appropriate funding source or government clearance, a project office may be established. One of the following criteria must be met in order to obtain permission to establish a project office:

• The project is funded directly by inward remittance from the overseas head company;
• The project is funded by a bilateral or multilateral international financial agency such as the World Bank or International Monetary Fund (IMF);
• The project has received clearance by the relevant authorities within India; or
• The Indian company awarding the contract has received a term loan for the project.

If none of the above criteria is met, an overseas company looking to establish a project office in India must make a specific request with the Central Office of the Reserve Bank of India (RBI) for approval.