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For what kind of business a foreign company open a Branch in India?
What are the conditions /requirements for opening a Branch in India?
What Documents are required for forming a Branch Office in India?
What are Other Incorporation Requirements for Branch Office?
What are the Post Incorporation Procedural Requirements for a Branch office?
What are the Annual Compliance Activities required for a Branch Office?
How to Close a Branch Office in India?
What is Branch office on 'Stand Alone basis" in India?
What is Liaison Office/Representative Office?
What is Project Office?
There are certain conditions for opening a branch in India for a foreign company. A branch can be opened for specific purposes, and there are some requirements and conditions for opening a branch office in India..
Foreign companies, including USA companies, are allowed to set up Branch Offices in India for the following purposes:
A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).
A branch office is is suitable for foreign companies looking to setup a temporary office in India and not interested or not planning to have long term plans for the Indian operations; except banking, shipping and airlines etc. mentioned above.
Currently as per the RBI Requirement the application for
the branch office and BRANCH office is submitted through the
Authorized dealer. The authorized dealer means the various
institution having banking licenses.
The following filings are required to open a branch office in India:
The application for BRANCH office Licenses is approved by the RBI, but as per the recent changes the applications for BRANCH office are routed through the Authorized Dealers (AD). Due to this the timeline for setting up the BRANCH office has increased tremendously. Further the documentation required for the same has also increased to a great extent.
Every Branch office registered with RBI shall get itself registered with the Ministry of Corporate Affairs, It is a registration by the Branch office as a establishment of foreign company in India. On such registration a CIN i.e., Corporate Identity Number is allotted by the Registrar of Companies. The following documents shall be filled with the Registrar of Companies :
After Incorporation, the following requirements are also necessary for a branch office:
Every year a branch office is required to undertake the following activities:
Also see Annual Corporate Filings in India for corporate maintenance requirements in India.
Generally a branch office licenses is given for three years. If at any time a Company plans to close the branch office setup in India it shall file the necessary documents with the RBI through its Authorized Dealer.
The application for the closure generally includes the followings:
Stand Alone Branch Offices are isolated and restricted to the Special Economic Zone (SEZ) alone and no business activity/transaction is allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India.
No approval is necessary from RBI for a company to establish a branch/unit in SEZs to undertake manufacturing and service activities subject to specified conditions.
A Liaison Office could be established with the approval of the government of India. The role of Liaison Office is limited to collection of information, promotion of exports/imports and facilitate technical/financial collaborations.
Liaison office cannot undertake any commercial activity directly or indirectly.
Foreign companies planning to execute specific projects in India can set up a temporary project/site offices in India for carrying out activities only relating to that project. The Government of India has now granted general permission to foreign entities to establish project offices subject to specified conditions.
Note: For a foreign Investor in India it is very important to choose a right kind of business or corporate entity which best suits its purposes and takes care of liability issues and tax planning issues. Foreign Companies planning to do business in India should pay special attention to Entry Strategies & Tax Planning for Foreign Investors and corporate structuring to save taxes to the best extent allowed by laws and international tax treaties.
Foreign Investors Establishing Branch in India
Foreign investors planning to open a branch in India are required to seek governmental approval before investing in India. See Articles below.
Services Offered by Us
Madaan & Co. has helped foreign companies, including USA Companies, in setting up their operations in India. A careful tax planning is required before opening a subsidiary, branch, joint venture, project office or liaison office in India. Click here to Contact us for setting up company in India
Our lawyers include those admitted to bar in the United States of America and India. They have undertaken legal matters in the USA, India and Europe. They understand the multi-cultural and the multi-jurisdictional aspects of international business in this age of globalization. They include those educated at Harvard Law School, Harvard University in the USA and premier universities in India. They believe in high moral and legal ethics.
Contact us for:
- Incorporating in a company in India
- Opening a Branch Office
- Opening a Project Office
- Setting up Joint Ventures in India
- Setting up a subsidiary in India
- Drafting Agreements
- Negotiating Agreements
- Setting up Outsourcing in India
- Dispute Resolution