Normally, Liaison Office are registered in India for specified/limited purpose and when such purposes are achieved, either LO may want to get registered as subsidiary of Indian company or do not want to continue its operations in India. In either case, for Liaison Office closure, it has to do following things:
File application of closure of Liaison Office with ROC
- Filing application for closure of Liaison Office with RBI through designated AD Category – I bank
- Remittance of proceeds abroad and closure of bank account in India
Once ROC closure has taken place, the application for winding up/closure of Liaison Office may be submitted along with the following documents with designated AD Category – I bank:
- Copy of the Reserve Bank’s approval for establishing the LO.
- Auditor’s certificate :
- Along with a statement of assets and liabilities of the applicant and indicating the manner of disposal of assets and the manner how the remittable amount has been generated;
- Confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc. of the office have been fulfilled.
- Confirming that no income accruing from sources outside India (including proceeds of exports) has remained un-repatriated to India.
- Confirmation from the applicant/parent company that no legal proceedings in any Court in India are pending against the LO.
- A report from the Registrar of Companies (ROC) regarding compliance with the provisions of the Companies Act, 2013.
- The designated AD Category – I banks will confirm that the LO had done their respective compliances.
- Any other document/s, required by Reserve Bank of India/AD Category-I bank while granting approval.
- Designated AD Category-I bank may allow remittance of winding up proceeds in respect of offices of banks and insurance companies, after obtaining copies of permission of closure from the sectorial regulators (like IRDA etc.) along with the documents mentioned above.
The designated AD Category – I bank will report to the Reserve Bank (the Regional Office concerned for LOs), along with a declaration stating that all the necessary documents submitted by the LO have been scrutinized and found to be in order for closure of Liaison Office.