India Branch Office
Operate a Branch Office (BO) in India to effectively conduct limited commercial activities identical to the foreign parent company while testing the massive Indian market.
Commercial Operations
Yes. Unlike a completely restricted Liaison Office, a Branch Office is fully permitted to sign commercial contracts, legally issue invoices, and earn income identically to the parent.
Parent Extension
Yes, property acquisition is permitted specifically for carrying out authorized business operations in India, subject to RBI clearances. However, dealing speculatively in real estate is prohibited.
Easier Repatriation
Applications from companies incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau require prior mandatory approval from the RBI and Ministry of Home Affairs.
Structure Overview
A Branch Office acts purely as an extension of the foreign holding company. Under FEMA and RBI guidelines, a Branch Office cannot commence manufacturing activities directly but can legally subcontract them to Indian manufacturers.
Ideal For:
- Foreign Trading Firms (Export/Import)
- Airlines and Shipping Companies
- IT & Tech Service Providers
- Consulting & Research Firms
Key Features:
- Limited Activities: Only specific activities defined by RBI are securely permitted.
- Manufacturing: Strictly prohibited from undertaking on its own.
- Funding: Initially funded by parent; subsequently can self-sustain via operations.
Setup Requirements (RBI Criteria)
- Track Record: Must possess a continuous profit-making track record for the preceding 5 years.
- Net Worth: Must maintain a minimum verified net worth of USD 100,000 via audited balances.
- Authorized Dealer (AD): Application must be strictly routed through an AD Category-I bank in India.
- Registered Office: A physically registered office address in India is mandatory.
Branch Office Registration Process
Typical timeline: 45 - 60 Days
Prepare Documents
Legally Apostille Certificate of Incorporation, MOA, & Financial Sheets.
Submit Form FNC
Submit Form FNC to Reserve Bank of India precisely through the AD Bank.
RBI Approval
RBI vetting, verification, and subsequent official approval to establish the BO.
ROC Registration
File Form FC-1 within 30 days of RBI approval with the MCA (ROC) portal.
PAN & TAN Application
Apply to the Income Tax Department for Permanent Account & Tax Numbers.
Bank Account Setup
Establish the official inward/outward BO banking operations via AD Bank.
Annual Compliance
File Annual Activity Certificate (AAC) sourced from Chartered Accountants.
Other Registrations
Obtain official GST, MSME, and local statutory state registrations.
Branch Office vs. Wholly-Owned Subsidiary (WOS)
| Feature | Branch Office (BO) | Wholly-Owned Subsidiary (WOS) |
|---|---|---|
| Legal Entity | Extension of Parent Company (No separate entity) | Separate Legal Entity completely registered in India |
| Liability | Unlimited (Parent Company Liability covers debts) | Strictly limited to the share capital invested in India |
| Tax Rate | Foreign Corporate Tax Rate (approx. 40% + surcharge) | Domestic Corporate Tax (approx. 15-25% + surcharge) |
| Manufacturing Capability | Not Permitted (May exclusively subcontract) | Fully Permitted under FDI and domestic labor laws |
Frequently Asked Questions
Can a Branch Office execute commercial contracts?
A branch office in India is taxed as a foreign company. The current corporate income tax rate for a foreign branch is typically 40% plus applicable surcharge and cess.
Can a Branch Office acquire real estate in India?
Yes, property acquisition is permitted specifically for carrying out authorized business operations in India, subject to RBI clearances. However, dealing speculatively in real estate is prohibited.
Are foreign companies from all countries allowed?
Applications from companies incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau require prior mandatory approval from the RBI and Ministry of Home Affairs.
What corporate taxes does a Branch Office pay?
A branch office in India is taxed as a foreign company. The current corporate income tax rate for a foreign branch is typically 40% plus applicable surcharge and cess.