Branch Office

As the name suggests, the branch office is setup by a foreign company in India to carry out local activity for its foreign business entity. The foreign company can have revenue flowing in from the Indian branch office only from the activities allowed by the Reserve Bank of India; it has to meet all its expenses of Indian office through remittances from the Head office or through the revenue generated from the Indian operation permitted by the Reserve Bank of 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.

ANALYSIS

A Branch office can do the following listed activities in India:

  • Export / Import of goods.
  • Rendering professional or consultancy services.
  • Carrying out research work.
  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
  • Acting as buying / selling agent in India.
  • Rendering services in information technology in India.
  • Technical support to the products supplied by parent companies.
  • Foreign airline / shipping company.

ROUTES

  • RBI Route: If the industry the Foreign Entity is in comes in the specified industries for 100% automatic route of investment as per Foreign Direct Investment Policy then the Branch Office will be approved by the Reserve Bank of India.
  • Government Route: If the industry the Foreign Entity is in doesn’t come in 100% automatic route and Non Profit and Non-Government Organization, then the Branch Office will be approved by Reserve Bank of India in consultation of the Ministry of Finance, Government of India.

HIGHLIGHTS

  • Annual Compliance: A Branch office has to do minimal annual compliances as compared to other forms of business in India.
  • Tenure: Approval is generally given for a period of 3 years and extension is granted on the basis of Track record of annual activity certificates. Record of the account maintained with the designated bank as per the terms and conditions of original approval.
  • Governance: Establishment of Branch Office/Representative Office in India is governed by Reserve Bank of India (RBI) together with Ministry of Finance, Government of India. The rules and regulations in respect to Liaison Offices are framed under Foreign Exchange Management Act, 1999 and Circulars/Notifications issued by RBI from time to time.

ELIGIBILITY

  • Profit making track record during immediate 3 financial years.
  • Net worth as per latest audited balance sheet certified by CPA should not be less than US $50,000 or its equivalent amount in home country.
  • A designated manager of the proposed Branch Office and
  • A prospective office space of the proposed Branch Office or Virtual Office /Service Office Set up.

Registration Process

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Branch Office

Obtain help of Professionals & Subject matter experts at CFO Affairs to understand the intricacies involved in the registration. We are more than happy to educate you and make your entity registration a hassle free process.

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