A Quick Glance at the Approval Procedure for Establishing Foreign NGOs in India
Starting a new business venture in a new country always involves striking the correct balance between cost and
risk. Companies may incur losses or face unanticipated costs, if the start up period of a business in a new country is
unexpectedly delayed. Errors in the choice of the legal entity could mean serious tax and other liabilities for the
parent company, while inadequate employment contracts could expose them to avoidable risks.
Every country has different regulations for licensing taxes, compliance laws, data privacy, trademarking, etc. and
prior to setting up a foreign operation it becomes necessary to be fully aware of the laws of that particular country.
For those interested in establishing foreign non-government organizations in India, the Reserve Bank of India has
clarified the approval procedure.
Here’s a quick glance:
The RBI has clarified the approval process for foreign non-government organizations (NGOs) to establish offices in
India. Both government and non-government entities must apply to the RBI for prior permission for the
establishment of offices in India.
Foreign Government and Non-Government Organizations
The RBI clarified that Foreign NGOs or Non-Profit Organizations (NPOs) or Foreign Government Bodies or
Departments must follow the Government Route to establish offices in India.
However, overseas companies doing business in India have been given general permission to establish Project
Offices (PO), if they are in contract with an Indian entity for carrying out a project in India. However, this is subject
to fulfillment of certain other requirements.
Person Resident outside India
A Person not resident in India must obtain the RBI’s approval for establishing Liaison Office (LO) or Branch Offices
(BO) in India.
Taking the help of a business consultant
As companies explore global expansion, it is advisable to have the right guidance of a trusted expert.
Multinationals need to comply with regulations while doing business overseas, as some have already burnt their
fingers with convictions and heavy penalties.
Partner with a service provider who has complete knowledge of international tax, compliance, and accounting
expertise needed to reduce the risk and liabilities of an overseas expansion. By teaming up with a reliable
business consultant, you can get the required assistance in all areas of your business like global transfer pricing,
international financial accounting, etc.
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