Open a Project Office in India from Australia

How to Register a Project Office in India from Australia

A Project Office (PO) is a temporary establishment set up by a foreign company in India specifically to execute a particular project. Unlike a Branch Office that operates indefinitely across multiple activities, or a Liaison Office that is limited to non-commercial representation, a Project Office is tied to a single project contract and ceases to exist upon the project's completion.

The India-Australia ECTA trade agreement and the broader Comprehensive Economic Cooperation Agreement (CECA) negotiations have opened new opportunities for Australian companies in infrastructure, mining, renewable energy, and technology projects in India. Bilateral trade reached US$24.1 billion in FY 2024-25, and Australia's total investment stock in India was US$27.6 billion at the end of 2024. For Australian companies that have won a specific contract — whether in construction, infrastructure, IT implementation, engineering, or consulting — a Project Office is the most efficient and compliant structure to execute that contract. For a comparison of all foreign office types, see Liaison Office vs Project Office vs Branch Office.

FDI Route and Regulatory Requirements

The establishment of a Project Office in India benefits from the RBI's general permission route, which is considerably simpler than the approval process for Branch or Liaison Offices. The Authorised Dealer (AD) Category-I bank can directly grant approval without forwarding the application to the RBI, provided certain conditions are met.

General Permission Conditions

The RBI has granted general permission to foreign companies to establish Project Offices in India when the following conditions are satisfied:

• Contract secured: The foreign company has secured a contract from an Indian company (public or private sector) to execute a project in India
• Funding route: The project meets at least one of the following funding criteria:
  • The project is funded directly by inward remittance from abroad
  • The project is funded by a bilateral or multilateral international financing agency (e.g., World Bank, ADB, AIIB)
  • The project has been cleared by an appropriate authority in India
  • The Indian entity awarding the contract has been granted a term loan by a Public Financial Institution or a bank in India for the project

Since Australia does not share a land border with India, Press Note 3 (2020) restrictions do not apply, and Australian companies face no additional security-related approvals.

Specific Permission Route

If the above general permission conditions are not met — for example, if the project is self-funded by the Australian parent without a contract from an Indian entity — the foreign company must apply to the RBI's Central Office for specific permission through the AD bank. This route takes longer (8-12 weeks additional) and requires more detailed justification. See Automatic Route vs Government Approval for details.

Scope of Activities

A Project Office is permitted to carry out only activities related to the execution of the specific project for which it was established. It cannot undertake any activity unrelated to the project, including marketing other products, providing services to other clients, or acting as a general representative of the parent company. If the Australian company needs a broader scope, it should consider a Branch Office or subsidiary instead.

DTAA Benefits for Australian Companies

The Double Taxation Avoidance Agreement between India and Australia, in force since 30 December 1991, is directly relevant to Project Offices because a PO can constitute a Permanent Establishment (PE) depending on the nature and duration of the project:

• Construction PE threshold: Under Article 5 of the India-Australia DTAA, a building site, construction, or installation project constitutes a PE only if it lasts more than 183 days within any twelve-month period. Projects shorter than 183 days may avoid PE classification.
• Business profits: If the Project Office constitutes a PE, business profits attributable to the PO are taxable in India at 35% for foreign companies (effective rate approximately 38.22% including surcharge and cess). The DTAA prevents double taxation by allowing Australian tax credits for taxes paid in India (Article 23).
• Interest: Withholding tax capped at 15% (10% for financial institutions) under Article 11
• Royalties and technical services fees: Capped at 10-15% under Article 12

Australian companies should structure project timelines and billing arrangements carefully with professional advice to optimise their tax position. Obtain a Tax Residency Certificate from the Australian Taxation Office and file Form 10F in India. See our DTAA Master Guide and India-Australia DTAA page for detailed guidance.

Document Requirements and Authentication

Both India and Australia are members of the Hague Convention (Apostille Convention). Australian documents require an apostille from DFAT (Department of Foreign Affairs and Trade) through Australian Passport Offices. For details on the process, see Apostille vs Embassy Attestation.

Documents Required from the Australian Parent Company

• Certificate of Incorporation or equivalent registration certificate (apostilled)
• Memorandum and Articles of Association / Constitution document (apostilled)
• Board resolution authorising the establishment of a Project Office in India for the specific project
• Power of Attorney in favour of the authorised representative in India (apostilled)
• Copy of the project contract awarded by the Indian entity (along with details of the Indian counterparty)
• Details of the project funding source (inward remittance, bilateral financing, or Indian bank term loan)
• Audited financial statements of the parent company (apostilled)
• Brief profile of the parent company including nature of business, relevant project experience, and countries of operation

Documents Prepared in India

• Application to the AD bank with project details and funding proof
• Proof of registered office address for the Project Office (rent agreement + NOC from landlord + utility bill)
• Digital Signature Certificate (DSC) for the authorised representative
• Form FC-1 for ROC registration (filed within 30 days of establishing the PO)

Step-by-Step Registration Process

Establishing a Project Office follows a streamlined process when the general permission conditions are met.

Step 1: Secure the Project Contract

Ensure the Australian company has a valid, executed contract from an Indian entity (government body, PSU, or private company) to execute a project in India. The contract should clearly define the scope, duration, and funding mechanism. This is the mandatory prerequisite for the general permission route.

Step 2: Prepare and Apostille Documents in Australia

Gather all required corporate documents. Have them notarised by an Australian notary public and apostilled by DFAT. Timeline: 1-2 weeks. DFAT apostille fees are AUD 85-130 per document.

Step 3: Apply to the AD Bank

Submit the application along with the project contract, funding proof, and all supporting documents to an Authorised Dealer Category-I bank in India. Under the general permission route, the AD bank can approve the application directly without forwarding it to the RBI. Timeline: 2-4 weeks.

Step 4: Register with the Registrar of Companies (ROC)

Within 30 days of establishing the Project Office, file Form FC-1 with the ROC under the Companies Act, 2013. The government fee is INR 6,000. The ROC assigns a Corporate Identity Number (CIN) to the Project Office. See our guide on FC-1 Foreign Company Registration.

Step 5: Report to RBI

The AD bank reports the establishment of the Project Office to the concerned Regional Office of the RBI under whose jurisdiction the PO is set up. The RBI allots a Unique Identification Number (UIN) based on the submitted data.

Step 6: Obtain PAN and TAN

Apply for a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) for the Project Office. These are required for tax filings, TDS compliance, and opening a bank account.

Step 7: Open Bank Accounts

Open an Indian Rupee current account and, if required, a Non-Interest-Bearing Foreign Currency Account (NIFCA) with the AD bank. The NIFCA can receive foreign currency receipts from the project sanctioning authority and remittances from the parent company or international financing agencies. Both accounts must be maintained with the same AD Category-I bank.

Timeline and Costs

The end-to-end timeline for establishing a Project Office in India from Australia is approximately 6-12 weeks under the general permission route:

Cost Breakdown

• ROC fees (Form FC-1): INR 6,000
• Government fees (PAN/TAN): INR 1,000-2,000
• Stamp duty: INR 3,000-10,000 (varies by state)
• Professional fees (CS/CA): INR 40,000-1,00,000 (includes AD bank application preparation)
• Apostille charges in Australia: AUD 85-130 per document (typically 4-6 documents)
• Total estimated cost: INR 60,000-1,30,000 plus apostille costs

Post-Registration Compliance

Project Offices have ongoing compliance obligations for the duration of the project:

• Annual Activity Certificate (AAC): Filed annually with the AD bank by 30 September, prepared by a Chartered Accountant, certifying that the Project Office has operated only within the scope of the approved project
• Income tax return: Filed annually as a foreign company; taxed at 35% on income attributable to the PO (plus surcharge and cess)
• GST compliance: If the Project Office provides taxable services or its turnover exceeds the threshold, GST registration and returns are mandatory
• Transfer pricing: Compliance with transfer pricing regulations for transactions between the PO and its parent company, including Form 15CA/15CB for outward remittances
• ROC annual filings: Annual financial statements filed with the ROC
• Audit: Mandatory annual audit by a practising Chartered Accountant in India
• Project completion closure: Upon project completion, the PO must wind up, settle all tax and regulatory obligations, obtain a CA certificate for fund remittance, and apply for closure through the AD bank

Beacon Filing provides comprehensive annual compliance, FEMA/RBI compliance, and corporate tax filing services for Project Offices.

Common Challenges for Australian Companies

Project Scope Limitation

A Project Office can only execute the specific project for which it was established. Australian companies that win multiple projects in India must either set up a separate Project Office for each project or consider establishing a Branch Office or subsidiary. Attempting to execute unrelated projects through a single PO is a FEMA violation. For multi-project operations, see Branch Office vs Subsidiary.

Temporary Nature and Winding Up

Unlike a Branch Office or subsidiary, a Project Office automatically ceases to exist upon project completion. The winding-up process requires settling all tax liabilities, obtaining clearance certificates, and remitting surplus funds through the AD bank. The closure process typically takes 3-6 months. Australian companies planning continued operations in India after project completion should plan the transition to a permanent structure well in advance.

Construction PE Threshold

Under the India-Australia DTAA, construction and installation projects lasting more than 183 days in any twelve-month period constitute a PE. Most infrastructure and construction projects exceed this threshold, making the PO a taxable PE in India. Australian companies should factor in the 35% corporate tax rate (effective ~38.22%) when pricing their contracts. For shorter projects (under 183 days), careful documentation of start and end dates can help avoid PE classification.

Fund Repatriation on Closure

The RBI has granted general permission for remittance of surplus funds upon project completion, subject to conditions: all Indian tax obligations must be settled, a CA certificate must confirm compliance, and the AD bank must verify that the remittance represents genuine surplus from the project. Delays in obtaining tax clearance certificates can hold up fund repatriation for 2-4 months. See our Repatriation Guide.

Multiple Currency Accounts

Project Offices can maintain both an INR current account and a Non-Interest-Bearing Foreign Currency Account (NIFCA), but both must be with the same AD bank. The NIFCA can hold foreign currency received from the project sanctioning authority or the parent company. Australian companies should choose an AD bank experienced with project financing and AUD-INR transactions to minimise FX conversion costs.

Frequently Asked Questions

Does an Australian company need RBI approval to open a Project Office in India?

Under the general permission route, the AD bank can approve the Project Office directly if the company has a contract from an Indian entity and meets the funding conditions (inward remittance, bilateral financing, or Indian bank term loan). Direct RBI approval is only required if these conditions are not met (specific permission route).

Can a Project Office execute multiple projects in India?

No. A Project Office is established for a single, specific project. If the Australian company wins additional contracts in India, it must set up a separate Project Office for each project or consider establishing a Branch Office or subsidiary for ongoing multi-project operations.

How is a Project Office taxed in India?

A Project Office that constitutes a Permanent Establishment is taxed as a foreign company at 35% on income attributable to the project (plus surcharge and 4% cess, effective rate approximately 38.22%). Under the India-Australia DTAA, Australian companies can claim foreign tax credits in Australia for taxes paid in India.

What happens when the project is completed?

Upon project completion, the Project Office must wind up its operations: settle all tax liabilities, obtain tax clearance certificates, file a final annual return with the ROC, and remit surplus funds through the AD bank. The AD bank verifies compliance before allowing the fund remittance. The winding-up process typically takes 3-6 months.

Can a Project Office be converted into a Branch Office or subsidiary?

No. A Project Office cannot be directly converted. The PO must be wound up first, and a fresh application must be submitted for the Branch Office (Form FNC-1 to AD bank) or subsidiary (SPICe+ on MCA portal). The processes run in parallel if planned in advance, but the PO's closure must be completed separately.

Is there a minimum net worth requirement for a Project Office?

Under the general permission route, there is no explicit minimum net worth or profit track record requirement for Project Offices (unlike Liaison Offices which require US$50,000 net worth and 3 years of profitability, or Branch Offices which require US$100,000 and 5 years). The key requirement is having a valid project contract and meeting the funding conditions.

Can a Project Office open a foreign currency bank account?

Yes. A Project Office can open a Non-Interest-Bearing Foreign Currency Account (NIFCA) with the same AD bank that holds its INR current account. The NIFCA can receive foreign currency from the project sanctioning authority and remittances from the parent company or international financing agencies.