Branch Office Registration in India
Establishing a Branch Office in India offers foreign companies a strategic advantage to expand their operations in one of the world's fastest-growing markets. With India emerging as a global business hub backed by economic reforms, digitalization, and investor-friendly regulations, setting up a branch office allows international businesses to operate efficiently without forming a separate local entity.
A branch office acts as an extension of the parent organization. It can engage in commercial activities, generate revenue, invoice clients, and represent the parent company across India while remaining legally connected to the head office abroad. Governed by FEMA (Foreign Exchange Management Act) and regulated by the Reserve Bank of India (RBI), the branch office structure is ideal for companies wanting full operational capability without dilution of ownership.
What is a Branch Office in India
A Branch Office is a foreign company's business establishment in India that performs activities approved by the RBI. It does not have a separate legal identity but operates as an extension of its parent company. The parent entity is fully liable for the operations of the branch.
Key Benefits of Registering a Branch Office in India
• Ability to conduct commercial activities and earn revenue
• Direct market access to Indian customers and suppliers
• 100 percent ownership retained by the foreign parent company
• Ability to hire local staff and open bank accounts
• Credible and recognized structure for international companies
• Suitable for sectors such as IT, consulting, manufacturing liaison, infrastructure, R and D, and trading
Eligibility Criteria
To register a Branch Office in India, the foreign company must meet the following benchmarks
• The company should have a profitable track record for the preceding five financial years
• The net worth of the parent company must be at least USD 100,000 verified by its auditors
• The business activity should fall under permissible sectoral regulations in India
Permitted Activities of a Branch Office
A Branch Office is allowed to
• Export or import goods
• Provide professional or consultancy services
• Carry out research work
• Promote technical or financial collaborations
• Represent the parent company in India
• Act as a buying or selling agent
• Provide IT and software services
• Offer support services to the parent company
Activities Not Permitted
• Retail trading activities
• Direct manufacturing in India
• Any activity prohibited under FEMA or requiring prior approval
Documents Required for Branch Office Registration
Parent Company Documents
• Certificate of Incorporation
• Memorandum and Articles of Association
• Audited Financial Statements for the last five years
• Board Resolution for opening the Branch Office
• Company Profile
Indian Office Documents
• Lease Agreement for office premises
• Utility bill as address proof
• KYC documents of the authorised representative in India
Every foreign document must be notarized and apostilled or consularised, depending on the country of origin.
Procedure for Branch Office Registration in India
Application to RBI
The initial approval is obtained from the Reserve Bank of India by filing Form FNC through an AD Category-I Bank.
Verification and Due Diligence
RBI examines the financial strength, background, and proposed activities of the parent company.
Issuance of Approval Letter
Once satisfied, RBI grants permission for the establishment of the branch office.
Registration with the Registrar of Companies
The branch office must register with the Ministry of Corporate Affairs by filing Form FC-1.
PAN, TAN, and Bank Account Opening
Post-approval, the Branch Office must secure a Permanent Account Number, Tax Account Number, and open its bank account in India.
GST Registration and Other Local Registrations
If the business activity requires, GST and other state-level registrations must be completed.
Commencement of Operations
The Branch Office can begin operations once all approvals and registrations are in place.
Timeline for Branch Office Registration
The typical registration process takes 30 to 45 working days, depending on documentation readiness and country of incorporation.
Compliance Requirements for a Branch Office in India
A Branch Office must follow ongoing compliance norms such as
• Annual filing with RBI
• Filing of audited financial statements with MCA
• Income tax filing
• Transfer pricing compliance if applicable
• GST returns if registered
• Reporting of any changes in office address, directors, or activities
Taxation of Branch Office in India
A Branch Office is taxed as a foreign company. The key tax considerations include
• Income tax rate of 40 percent plus applicable surcharge and cess
• Transfer pricing regulations
• Withholding tax requirements
• Profit repatriation permitted after paying applicable taxes
Why Foreign Companies Prefer Branch Offices
• Strong control over operations
• Ability to generate revenue directly
• Quick setup compared to subsidiaries
• Ideal for long-term expansion strategies
• Transparent compliance framework
Common Challenges in Branch Office Registration
• Detailed documentation and apostille requirements
• Sectoral restrictions for certain industries
• RBI scrutiny of financial stability
• Complex tax and compliance landscape
How Team TAXAJ Assists in Branch Office Registration
With extensive experience in FEMA, RBI approvals, corporate compliance, and foreign entity setup, Team TAXAJ offers end-to-end support such as
• Evaluation of eligibility and documentation planning
• Drafting and filing Form FNC with RBI
• Coordination with banks, RBI, and MCA
• Post-setup registrations including PAN, TAN, GST
• Annual compliance and tax filings
• Advisory on transfer pricing and FEMA regulations
Team TAXAJ ensures a seamless registration experience while keeping your organisation fully compliant with Indian laws.
Frequently Asked Questions
What is the cost of Branch Office Registration
The cost varies depending on documentation, legalisation requirements, government fees, and professional charges.
Can a Branch Office repatriate profits
Yes, profits can be remitted to the parent company after paying applicable taxes.
Is RBI approval mandatory
Yes, RBI approval is mandatory for all foreign companies setting up branch offices in India.
Can a Branch Office employ staff
Yes, it can hire Indian and foreign employees subject to immigration norms.
Can a Branch Office engage in manufacturing
No, it is not permitted to undertake direct manufacturing in India.