Set Up a Project Office in India from Belgium

How to Register a Project Office in India from Belgium

A Project Office (PO) is a temporary establishment that allows a Belgian company to execute a specific project contract awarded by an Indian entity. Unlike a Liaison Office, a Project Office can undertake commercial activities — but only those directly related to the contracted project. Unlike a Branch Office or Private Limited Company, the Project Office ceases to exist once the project is completed.

With bilateral trade between India and Belgium at USD 12.91 billion in FY25 and Belgian FDI flows to India totalling USD 4.02 billion (April 2000-March 2025), the commercial relationship between the two countries is substantial. Over 200 Belgian companies operate in India, with significant investments in manufacturing, IT, pharmaceuticals, and chemicals. In March 2025, a major Belgian Economic Mission led by HRH Princess Astrid signed 37 agreements covering climate, renewable energy, healthcare, advanced materials, transport, aerospace, and defence — sectors where project-based engagements are common.

Belgian companies in infrastructure, engineering, dredging (Jan De Nul, DEME), renewable energy, and defence manufacturing frequently use Project Offices to execute specific Indian contracts. The Project Office can be established under the RBI's General Permission route (no prior RBI approval needed) if funding conditions are met, or through a Specific Approval route for restricted cases.

FDI Route and Regulatory Requirements

A Project Office operates under a unique regulatory framework — the RBI has granted a standing General Permission for eligible foreign companies, making it the fastest office establishment route for project-based work in India.

General Permission Route (No Prior RBI Approval)

A Belgian company that has been awarded a contract by an Indian entity can establish a Project Office in India without prior RBI approval, provided at least one of the following conditions is met:

• The project is funded directly by inward remittance from abroad (from the Belgian parent or its bankers)
• The project is funded by a bilateral or multilateral international financing agency
• The project has been cleared by an appropriate authority in India
• The Indian entity awarding the contract has obtained a term loan from a Public Financial Institution or bank in India for the project

Under this route, the Belgian company reports the establishment to the concerned regional office of the RBI through its AD Category-I bank. No waiting period for RBI approval is required.

Specific Approval Route

Under the RBI's 2025 draft regulations, the Specific Approval Route applies when:

• The foreign entity is from a country subject to Press Note 3 restrictions (not applicable to Belgium)
• The entity operates in sensitive sectors such as defence, telecom, private security, or information broadcasting
• The entity has foreign government ownership
• The project is in a restricted geographic area (Jammu & Kashmir, Ladakh, Northeast India, or Andaman & Nicobar Islands)

Press Note 3 — Not Applicable to Belgium

Press Note 3 (2020), which imposes additional security screening on entities from countries sharing a land border with India, does not apply to Belgium. Belgian companies proceed through the General Permission or standard Specific Approval route without additional government clearance.

Key 2025 Regulatory Changes

The RBI's 2025 draft regulations introduce several improvements for Project Offices:

• A single Project Office may undertake multiple projects (previously, each project required a separate PO)
• Separate books of accounts must be maintained for each project
• Additional places of business can be opened under mere intimation to the designated bank
• The UIN allotment process has been streamlined — AD banks report establishment details, and RBI allots the UIN based on submitted data

DTAA Benefits for Belgian Investors

The India-Belgium Double Taxation Avoidance Agreement, originally signed on April 26, 1993, effective since October 1, 1997, and recently amended by a Protocol that came into force on June 26, 2025, has direct implications for Project Office taxation. The 2025 amendment aligns the treaty with OECD BEPS standards, introduces anti-abuse provisions, and enables mutual assistance in tax collection.

Project Office and Permanent Establishment

Under the India-Belgium DTAA, a building site or construction or installation project constitutes a Permanent Establishment (PE) only if it lasts more than 6 months. For Belgian companies executing short-term projects (under 6 months), the Project Office may not trigger PE status, meaning India may not tax the Belgian company's business profits from that project. For projects exceeding 6 months, the Project Office will constitute a PE, and attributable business profits will be taxable in India.

Tax Rates for Project Office

• Corporate Tax (if PE exists): 35% plus applicable surcharge and cess, as a foreign company
• Dividends: Withholding capped at 15% under the DTAA
• Interest: Withholding capped at 10% under the DTAA (for loans advanced after January 23, 1988)
• Royalties: Capped at 10% under the DTAA (for contracts signed after January 23, 1988)
• Fees for Technical Services: Capped at 10% under the DTAA

Double Tax Relief

Belgium provides credit for Indian taxes paid by the Belgian parent company. The Belgian parent includes the Project Office's income in its global income and receives a credit for Indian taxes paid, preventing double taxation. The 2025 amendment strengthens the exchange of information provisions, ensuring both countries have access to taxpayer data for proper credit determination.

Transfer Pricing

Transactions between the Belgian head office and the Indian Project Office must comply with India's transfer pricing regulations. The attribution of profits to the Project Office, charges for head office services, equipment usage, and intellectual property must be at arm's length prices. The 2025 treaty amendment also addresses base erosion concerns, requiring careful documentation of profit allocation.

2025 Treaty Amendment: Anti-Abuse Provisions

The amended protocol introduces a principal purpose test (PPT): if one of the principal purposes of an arrangement is to obtain treaty benefits, those benefits may be denied. Belgian companies must ensure that their Project Office structure is driven by genuine commercial need (i.e., executing the Indian contract) rather than tax planning.

Document Requirements and Authentication

Both Belgium and India are members of the Hague Apostille Convention. Belgian documents require apostille certification for use in India.

Documents from the Belgian Parent Company

• Certificate of Incorporation or Extract from the Banque-Carrefour des Entreprises (Crossroads Bank for Enterprises) — apostilled
• Board resolution authorising the establishment of a Project Office in India — apostilled
• Articles of Association (Statuts / Statuten) — apostilled
• Project contract or agreement awarded by the Indian entity — apostilled
• Latest audited financial statements of the Belgian parent — apostilled
• Power of Attorney in favour of the authorised representative — apostilled
• Details of project funding arrangement

Documents for AD Bank Reporting

• Letter to the AD Category-I bank reporting the establishment of the Project Office
• Copy of the project contract with the Indian entity
• Evidence of funding source (remittance confirmation, financing agreement, or term loan sanction letter)
• Proposed organisational structure of the Project Office
• Estimated project timeline and budget

Apostille Process in Belgium

In Belgium, apostilles are issued exclusively in electronic format (e-Apostille) by the Federal Public Service Foreign Affairs (SPF Affaires etrangeres / FOD Buitenlandse Zaken), located at Rue des Petits Carmes 27, 1000 Brussels. Since May 1, 2018, paper apostilles are no longer available. The e-Apostille costs EUR 20 per document and is typically processed within 48 hours. The authenticity of the electronic apostille can be verified online through the Belgian e-Apostille register.

Step-by-Step Registration Process

The Project Office setup under the General Permission route is faster than a Branch or Liaison Office, as no prior RBI approval is needed.

Step 1: Secure the Project Contract

The Belgian company must first be awarded a specific project contract by an Indian entity. The contract should clearly define the scope of work, timeline, deliverables, and payment terms. This contract is the legal foundation for the Project Office.

Step 2: Belgian Parent Board Resolution

The board of directors of the Belgian parent company passes a resolution authorising the establishment of a Project Office in India for the specific project. The resolution must reference the project contract and appoint an authorised representative. Submit the resolution to the FPS Foreign Affairs for e-Apostille.

Step 3: Verify Funding Eligibility

Confirm that the project meets at least one of the General Permission conditions — direct funding by inward remittance, international financing, appropriate authority clearance, or Indian term loan funding. If none apply, the Specific Approval route through RBI is required.

Step 4: Report to AD Bank and Obtain UIN

Under the General Permission route, the Belgian company reports the establishment to the concerned regional office of the RBI through its AD Category-I bank. The AD bank reviews the documents and the RBI allots a Unique Identification Number (UIN). No waiting period for prior approval is required.

Step 5: Register with Registrar of Companies

Within 30 days of establishing the Project Office, file Form FC-1 with the Registrar of Companies (ROC) under Section 380 of the Companies Act, 2013. Include the project contract, charter documents, and address proof.

Step 6: Obtain PAN, TAN, and GST Registration

Apply for a PAN in the name of the Belgian parent company (Indian Project Office). Obtain TAN for tax deduction at source and GST registration if the project activities attract GST.

Step 7: Open Bank Accounts

Open project-specific bank accounts with the AD Category-I bank. Under the 2025 draft regulations, maintain separate accounts for each project if the PO undertakes multiple projects. Project payments from the Indian entity and inward remittances from Belgium will flow through these accounts.

Step 8: Commence Project Work

Once registrations and bank accounts are operational, the Project Office can begin executing the contracted project. Activities must be strictly limited to the specific project scope.

Timeline and Costs

The Project Office setup under the General Permission route is typically the fastest office establishment process in India.

Total estimated timeline: 4-8 weeks from document preparation to operational Project Office (General Permission route). Add 4-8 weeks if the Specific Approval route is required.

Total estimated cost: INR 1,00,000-2,50,000 (approximately EUR 1,050-2,650) including government fees, professional fees, and legal costs. Project operational costs (staffing, equipment, materials) are separate.

Post-Registration Compliance

A Project Office has specific compliance obligations tied to the project lifecycle.

Annual RBI Compliance

• Annual Activity Certificate (AAC): A Chartered Accountant must certify that the Project Office undertook only activities related to the approved project. Submit AAC and audited financial statements to the AD bank within 6 months of the financial year end.
• FLA Return: Annual Return on Foreign Liabilities and Assets, due by July 15
• Project-wise accounts: Under the 2025 draft regulations, maintain separate books of account for each project
• Non-submission risk: Failure to submit the AAC for three consecutive years triggers account freezing and may lead to closure proceedings

ROC Filings

• Annual return of foreign company filed with the ROC
• Financial statements of the Project Office and copies of the Belgian parent's global financial statements
• Intimation of changes in the Belgian parent's charter, directors, or registered office within 30 days

Tax Compliance

• Corporate Tax Return: If the Project Office constitutes a PE (project exceeding 6 months), file as a foreign company at 35% plus surcharge and cess
• GST Returns: Monthly or quarterly depending on turnover
• TDS Returns: Quarterly filing for all tax deducted at source
• Transfer Pricing Documentation: Required for transactions between the Project Office and the Belgian head office
• Advance Tax: Quarterly instalments if the tax liability exceeds INR 10,000

Project Completion and Closure

Upon project completion, the Project Office must:

• File a final AAC covering the project closure period
• Settle all tax liabilities and obtain tax clearance certificates
• Remit remaining balances to the Belgian parent through the AD bank
• File closure documents with the ROC
• Surrender the PAN, TAN, and GST registrations

Common Challenges for Belgian Companies

Belgian companies operating Project Offices in India face several practical challenges.

Scope Limitation

A Project Office is tied to a specific project contract. It cannot undertake any commercial activity outside that project's scope. Belgian dredging companies (such as Jan De Nul or DEME) that win multiple Indian contracts must either establish separate Project Offices for each (under old rules) or register multiple projects under one PO with separate accounts (under the 2025 draft regulations). For a broader, long-term presence, a Branch Office or Private Limited Company is more appropriate.

PE Threshold and Tax Exposure

The 6-month PE threshold under the India-Belgium DTAA means most infrastructure, construction, and engineering projects will trigger PE status and the 35% foreign company tax rate. Belgian companies must factor this tax cost into project pricing. Careful structuring — splitting work between onshore and offshore components — can help optimise the tax position, but must be backed by genuine business rationale, especially given the 2025 anti-abuse provisions.

2025 Treaty Anti-Abuse Provisions

The amended India-Belgium DTAA (effective June 2025) introduces the principal purpose test. Belgian companies must ensure their Project Office arrangements are commercially driven, not tax-motivated. The mutual assistance in tax collection provision also means Indian tax authorities can request Belgian cooperation in recovering tax dues — a significant change from the previous treaty framework.

Project Delays and Compliance

Indian infrastructure projects frequently experience delays due to land acquisition issues, regulatory clearances, or contractor disputes. A Project Office that extends beyond its estimated timeline must continue all annual compliance filings. Failure to submit the AAC for three consecutive years triggers account freezing — a serious risk for delayed projects where the Belgian parent may have reduced its attention to Indian compliance.

Closure Complexity

Closing a Project Office requires settlement of all liabilities, tax clearance, a final AAC, and ROC deregistration. Pending tax assessments, disputes with the Indian contracting party, or unresolved GST credits can delay closure significantly. Belgian companies should build closure timelines and costs into project budgets from the outset.

Frequently Asked Questions

Does a Belgian company need RBI approval for a Project Office?

Not necessarily. Under the General Permission route, a Belgian company with a project funded by inward remittance, international financing, appropriate authority clearance, or Indian term loan can establish a Project Office without prior RBI approval — it only reports to the AD bank. The Specific Approval route applies to restricted sectors or sensitive geographies.

Can a Project Office undertake activities beyond the contracted project?

No. A Project Office is strictly limited to activities related to the specific project contract. Commercial activities outside the project scope attract regulatory penalties, including FEMA violations and potential revocation of the establishment approval.

How is a Project Office taxed in India?

If the project lasts more than 6 months (the PE threshold under the India-Belgium DTAA), the Project Office is treated as a PE and business profits are taxed at 35% plus surcharge and cess. Projects under 6 months may not trigger PE status, potentially avoiding Indian tax on business profits.

What happens when the project is completed?

The Project Office must file a final AAC, settle all tax liabilities, obtain clearance certificates, remit remaining balances to Belgium through the AD bank, and deregister with the ROC. The closure process typically takes 3-6 months.

How does the 2025 DTAA amendment affect Belgian Project Offices?

The 2025 amendment introduces anti-abuse provisions (principal purpose test) and mutual assistance in tax collection. Belgian companies must ensure the Project Office is commercially driven. The PE threshold and tax rates remain unchanged.

Can one Project Office handle multiple projects?

Under the 2025 draft regulations, yes. A single Project Office can undertake multiple projects, provided separate books of account are maintained for each project. Previously, each project required a separate PO with separate bank accounts.