How to Set Up a Project Office in India from UAE
A Project Office (PO) is a purpose-built establishment that allows a UAE-based company to execute a specific project in India without incorporating a separate legal entity. The Project Office is an extension of the UAE parent company, tied to a defined project contract, and automatically closes upon project completion. It operates under the parent company's name, credit, and liability.
The UAE is India's third-largest trading partner, with bilateral trade reaching USD 100.05 billion in FY 2024-25. The UAE-India CEPA (effective May 2022) and a Bilateral Investment Treaty (effective August 2024) have created a robust framework for cross-border investment. UAE cumulative FDI into India stands at USD 22.85 billion from April 2000 to March 2025, concentrated in real estate, infrastructure, energy, and financial services — sectors where Project Offices are commonly established for large-scale contract execution.
A Project Office is ideal when the UAE company has been awarded a specific project contract by an Indian entity — typically in infrastructure, construction, oil and gas, renewable energy, or engineering. If the company seeks a permanent commercial presence beyond a single project, a Branch Office or Wholly Owned Subsidiary would be more appropriate.
FDI Route and Regulatory Requirements
The RBI provides two distinct routes for establishing a Project Office: General Permission (through AD Banks) and Specific Permission (requiring direct RBI approval). UAE companies overwhelmingly qualify for the General Permission route.
General Permission Route (AD Bank Approval)
The RBI has granted general permission to foreign companies to establish Project Offices in India through an Authorised Dealer (AD) Category-I Bank, provided at least one of the following conditions is met:
- The project is funded directly by inward remittance from the UAE parent company
- The project is funded by a bilateral or multilateral International Financing Agency (e.g., Abu Dhabi Fund for Development, World Bank, ADB)
- The project has been cleared by an appropriate authority in India
- The Indian company awarding the contract has been granted a term loan by a Public Financial Institution (PFI) or a bank in India for the project
Under the General Permission route, the AD Bank processes the application and grants approval without forwarding it to the RBI.
Specific Permission Route (RBI Approval)
Specific RBI approval is required if:
- The applicant is from Pakistan (full RBI approval required)
- The applicant is from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau and seeks to open a Project Office in Jammu & Kashmir, Ladakh, the Northeast, or the Andaman and Nicobar Islands
- The principal business falls in Defence, Telecom, Private Security, or Information and Broadcasting
The UAE is not subject to any of these restrictions.
Press Note 3 — Not Applicable
UAE companies are not subject to Press Note 3 restrictions and can establish Project Offices under the General Permission route without additional government security clearance.
DTAA Benefits for UAE Investors
The India-UAE DTAA, originally signed in 1993 and comprehensively revised in 2018 (effective from 1 April 2024), has significant implications for Project Offices. A Project Office typically constitutes a Permanent Establishment (PE) of the UAE parent in India if the project duration exceeds 9 months (under the revised treaty's construction PE article).
Tax Treatment of Project Office Profits
Profits attributable to the Indian Project Office are taxable in India at the corporate tax rate for foreign companies — currently 35% plus applicable surcharge and cess, resulting in an effective rate of approximately 38.22%. The revised DTAA provides important protections:
- Taxation limited to attributable profits: India can only tax profits directly attributable to the Project Office's activities, not the global profits of the UAE parent
- Dividends: 10% maximum withholding tax
- Interest: 5% (banks) or 12.5% (others) vs. 20% domestic rate — a significant improvement from the original treaty
- Royalties and FTS: Capped at 10% of the gross amount
The substantially reduced interest rate of 5% for banks under the revised DTAA is particularly beneficial for project financing structures. The Project Office must obtain a Tax Residency Certificate from the UAE Federal Tax Authority and file Form 10F in India to claim DTAA benefits.
Document Requirements and Authentication
The UAE is not a member of the Hague Apostille Convention for incoming documents. UAE documents destined for use in India require embassy attestation — a multi-step authentication chain that takes longer than apostille but is the legally accepted method.
Embassy Attestation Process for UAE Documents
The authentication chain for UAE-origin documents used in India follows this sequence:
- Notarisation: Documents are notarised by a UAE Notary Public
- UAE Ministry of Foreign Affairs (MOFA) attestation: MOFA authenticates the notarised documents
- Indian Embassy attestation: The Embassy of India in Abu Dhabi or the Indian Consulate in Dubai attests the MOFA-authenticated documents
For Free Zone companies, an additional step of Free Zone Authority attestation may be required before MOFA attestation, depending on the specific Free Zone.
Documents Required from UAE
- Certificate of Incorporation / Trade License of the UAE parent company (embassy attested)
- Memorandum and Articles of Association or equivalent constitutional documents (embassy attested)
- Board Resolution / Partner Resolution approving the establishment of a Project Office in India and appointing an authorised representative (embassy attested)
- Audited Financial Statements for the last 3 financial years (embassy attested)
- Project contract awarded by the Indian entity, signed by both parties (embassy attested copy)
- Power of Attorney authorising a person in India to represent the company (notarised and embassy attested)
- Passport copies and address proof of the authorised representative (notarised and embassy attested)
- Good Standing Certificate from the relevant Free Zone Authority or DED (embassy attested)
Documents Required in India
- Proof of registered office address in India (rental agreement or sale deed plus NOC from owner)
- Details of the specific project to be executed, including project value, duration, and scope
- Evidence of project funding (inward remittance receipts, term loan sanction letter, or clearance from appropriate authority)
- Projected financials for the Project Office for the project duration
Step-by-Step Registration Process
Step 1: Secure the Project Contract
Before applying for a Project Office, the UAE company must have a signed contract with an Indian entity for a specific project. The contract should clearly define the project scope, duration, value, and funding arrangement. This is the foundational document — without it, no Project Office application can be filed.
Step 2: Document Preparation and Embassy Attestation in UAE (7-14 Working Days)
Prepare all required documents and obtain embassy attestation through the multi-step process: UAE notarisation, MOFA attestation, and Indian Embassy/Consulate attestation. Free Zone companies should factor in additional time for Free Zone Authority attestation. Engage a professional attestation service to manage the process efficiently.
Step 3: File Form FNC with AD Bank (1-2 Working Days for Submission)
Submit the completed Form FNC (Part I) along with all embassy-attested documents to a designated AD Category-I Bank in India. Part I of Form FNC is used when the UAE company qualifies under the General Permission route. The AD Bank verifies the project contract and funding conditions.
Step 4: AD Bank Approval (2-4 Weeks)
The AD Bank processes the application under the General Permission route and issues approval, typically within 2-4 weeks. The approval letter specifies the project for which the office is established, permitted activities, and validity period (coterminous with the project duration). The approval letter is valid for 6 months within which the Project Office must be fully established.
Step 5: ROC Registration — Form FC-1 (Within 30 Days of Approval)
Within 30 days of receiving AD Bank approval, register the Project Office with the Registrar of Companies by filing Form FC-1 under Section 380 of the Companies Act, 2013. The prescribed fee is INR 6,000.
Step 6: Obtain PAN and TAN (1-2 Weeks)
Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department. These are mandatory for tax compliance and TDS deduction.
Step 7: Open Bank Account (2-3 Weeks)
Open a bank account with the designated AD Category-I Bank. The UAE parent remits project funds to this account. The bank issues an FIRC for all inward remittances.
Step 8: GST and Other Registrations (1-2 Weeks)
Register for GST (mandatory for project execution involving supply of goods or services), Professional Tax, and state-level registrations such as Shops and Establishments Act and labour welfare fund.
Timeline and Costs
Realistic Timeline from UAE
- Project contract finalisation: varies (prerequisite)
- Document preparation and embassy attestation (UAE): 7-14 working days
- Form FNC filing and AD Bank approval: 2-4 weeks
- ROC registration (Form FC-1): 3-5 working days
- PAN and TAN: 1-2 weeks
- Bank account opening: 2-3 weeks (can overlap)
- Total: 5-10 weeks end-to-end (after contract is in place)
Fee Breakdown
- ROC filing fee (Form FC-1): INR 6,000
- Embassy attestation charges (UAE): AED 100-200 per document (Indian Embassy fees) plus MOFA and notarisation fees
- AD Bank processing charges: varies by bank (typically INR 10,000-25,000)
- Professional fees (CA/CS): INR 30,000-75,000
- PAN and TAN application: INR 200 each
- Registered office rent: INR 10,000-50,000/month depending on city and project location
A Project Office does not have authorised capital or share capital. Project funds are remitted by the UAE parent company as per the project funding arrangement.
Post-Registration Compliance
Project Offices in India have ongoing compliance obligations throughout the project duration:
- Annual Activity Certificate (AAC): a certificate from a practising Chartered Accountant confirming that the Project Office's activities are in accordance with the RBI approval, filed by 30 September each year through the AD Bank
- Audited Financial Statements: filed annually with the AD Bank and the Director General of Income Tax (International Taxation), New Delhi
- Form FC-4 (Annual Return): filed with the ROC within 60 days of the financial year-end
- Form FC-3 (Financial Statements): filed with the ROC within 6 months of the financial year-end
- Income Tax Return: filed by 31 October each year
- GST Returns: monthly GSTR-1 and GSTR-3B if registered
- Transfer Pricing Documentation: required for transactions between the Project Office and the UAE parent
- FLA Return: annual filing with the RBI by 15 July
Project Completion and Closure
Upon project completion, the Project Office must be wound up. The closure process involves submitting a closure application to the AD Bank with: all AACs filed up to the current financial year, a CA certificate confirming settlement of all liabilities, proof that all Indian taxes have been paid, and confirmation that no legal proceedings are pending. The AD Bank can authorise remittance of surplus funds to the UAE parent after verifying compliance. The ROC must be separately notified of the closure.
Common Challenges for UAE Companies
Embassy Attestation Process
The multi-step embassy attestation chain (notarisation, MOFA, Indian Embassy) adds 1-2 weeks compared to the simpler apostille process available to companies from Hague Convention member countries. Free Zone companies face an additional attestation step from their Free Zone Authority. UAE companies should begin the attestation process as soon as the project contract is signed to avoid delays.
Single-Project Restriction
A Project Office is established for a specific project only. If the UAE company wins additional contracts in India, it must either apply for a separate Project Office for each new project or consider establishing a Branch Office that can handle multiple engagements simultaneously.
UAE Corporate Structure Complexity
UAE companies may be established under mainland DED, various Free Zone Authorities (JAFZA, DMCC, DIFC, ADGM, RAK FTZ, etc.), or offshore structures. Each type has different documentation requirements. Joint venture structures common in UAE construction (where a UAE company partners with a local partner) may require additional corporate resolutions and documentation.
Higher Tax Rate
Project Offices of foreign companies are taxed at 35% (plus surcharge and cess, effective ~38.22%), compared to 22-25% for Indian domestic companies. For large, multi-year projects, UAE companies should evaluate whether incorporating an Indian subsidiary would be more tax-efficient, particularly given the revised DTAA's favourable rates.
Project Delays and Extensions
Infrastructure and construction projects in India frequently face delays. The AD Bank can grant extensions of up to 6 months; any further extensions require prior RBI approval. Failure to apply for extensions before the project completion date can complicate the regulatory position of the Project Office.
UAE Corporate Tax Coordination
With the introduction of UAE corporate tax at 9% from June 2023, UAE companies operating Project Offices in India must coordinate tax planning across both jurisdictions. The revised India-UAE DTAA provides mechanisms to avoid double taxation, but proper planning is essential to optimise the overall tax burden.
Frequently Asked Questions
Does a UAE company need RBI approval to open a Project Office in India?
Under the General Permission route, the AD Category-I Bank can approve the Project Office directly — RBI involvement is not required for most UAE companies. The key requirement is a valid project contract with an Indian entity and at least one of the four funding conditions specified by the RBI.
Can a Project Office undertake activities beyond the specific project?
No. A Project Office is strictly limited to activities related to the execution of the project for which it was established. It cannot undertake any other commercial activity, trading, or service provision. For broader commercial activities, consider a Branch Office or Private Limited Company.
Why does the UAE require embassy attestation instead of apostille for Project Office documents?
The UAE is not a signatory to the Hague Apostille Convention for incoming documents. Therefore, UAE-origin documents destined for India must go through the embassy attestation chain: UAE notarisation, MOFA attestation, and Indian Embassy attestation. This takes 7-14 working days compared to 5-7 days for apostille.
Can a UAE Free Zone company set up a Project Office in India?
Yes. Companies registered in UAE Free Zones (JAFZA, DMCC, DIFC, ADGM, etc.) can establish Project Offices in India. Additional documentation from the Free Zone Authority, including a Good Standing Certificate and Free Zone Authority attestation, may be required before MOFA attestation.
What happens when the project is completed?
Upon project completion, the Project Office must be wound up. The UAE company files a closure application through the AD Bank, settles all liabilities and taxes, and remits surplus funds to the UAE. The ROC registration must also be cancelled. If the company wins new projects, it can open separate Project Offices.
How long does it take to establish a Project Office from UAE?
The process typically takes 5-10 weeks, including document embassy attestation in UAE (7-14 days), Form FNC filing and AD Bank approval (2-4 weeks), ROC registration (3-5 days), and bank account opening (2-3 weeks, can overlap). The approval letter is valid for 6 months.
How does the revised India-UAE DTAA affect Project Office taxation?
The revised DTAA (effective April 2024) provides more favourable withholding rates, particularly the reduced interest rate of 5% for banks. Project Office profits are still taxed at approximately 38.22% in India, but the DTAA ensures taxation is limited to profits directly attributable to the Project Office. The UAE parent can claim credit for Indian taxes paid against its UAE corporate tax liability.