For foreign companies that plan to set up their business operations in India, Liaison Office (LO) is the best option. The aim of setting up a Liaison Office is to explore possible business opportunities in another country by gathering relevant business information. Apart from this, starting a Liaison Office facilitates exports and helps a foreign company to have their presence in another country from worldwide business outlook.
A Liaison Office is also known as a Representative Office. A liaison office can undertake only liaison activities in India. In other words, it can act as a medium of communication between Head Office (which is outside India) and parties in India.
A wholly owned subsidiary can belong to the same industry as that of the parent company or it can belong to a different industry altogether.