What is Foreign Company Branch Office Registration in India?
If you are a foreign company planning to expand your business in India, setting up a branch office is a good option. A branch office is an extension of the foreign company in India and can engage in commercial activities as per the Indian laws. In this guide, we will take you through the process of registering a branch office of a foreign company in India, including the documents required, eligibility criteria, and other important details.
For foreign nationals, it is critical to select the right type of business structure that not only best suits your business objectives but also addresses liability and tax planning concerns.
Foreign companies that want to start a business in India should pay close attention to the Indian entry laws and international tax treaties. A foreign company may establish a business in India in accordance with the guidelines outlined in the RBI's FDI policy.
There are only two options for foreign nationals to start business in India, by setting up an Indian subsidiary company or by opening a branch office. Both can be possible either through an automatic route or through govt. approval route. Foreign entities can also establish project offices or liaison offices purely for non commercial activity.
One of the common strategies of the firms to expand their business at the international level is to set up branch offices at different places. Branch offices are a part of the parent organization, which are opened to perform the same or partially the same business operations as performed by the parent company to increase their reach.
Every branch office (BO)/ liaison office (LO) / project office (PO) shall get itself registered with the registrar of companies (ministry of corporate affairs) and obtain approval from RBI, Every branch office is registered as an establishment of foreign company in India. On such registration a CIN i.e., corporate identity number is allotted by the registrar of companies.
A branch office is suitable for foreign companies looking to set up a temporary office in India and do not intend to have long-term plans for the Indian operations; except for banking, shipping, and airlines, etc.
Liaison office is a place of business which functions as a communication center between the principal places of business/head office and entities in India, but it does not undertake any commercial, trading or industrial activity, directly or indirectly. It is not permitted to receive inward remittances from abroad.
Project office Foreign companies that have been awarded a contract to execute a project in India, select the mode of execution of the project, through project offices duly registered with the Reserve Bank of India. (RBI) and registrar of companies (ROC). ‘Project office’ is referred to as a temporary branch office of the foreign company to execute the project in India. The only difference between the liaison office and the project office is that the project office can carry out commercial activities pertaining to the particular project whereas The liaison office cannot execute any commercial activities.
The following documents are required for opening a branch office in India.
- Letter of intent and comfort letter from the authorized signatory of the parent company intending to support the operation in India.
- An authorization letter from the parent company in favor of a local representative.
- Board resolution from the parent company for setting up a branch office in India.
- Existing company incorporation certificate/registration certificate, memorandum & articles of association (charter document) of the parent company duly attested by the Indian embassy or notary public in the country. of registration.
- The latest audited balance sheet and annual account statement of the parent company of the last three years duly attested and notarized in the English language.
- Details of the bank account of the parent company in the home country.
- Commitment statement from the organization to open to report / opinion sought from its bankers by the government of India / reserve bank of India.
- Expected investment/ expenses for operations in India.
- Rent agreement/ lease agreement of proposed local office.
- The number of people likely to be employed, including foreign nations.
- Details of business activity carried out in the home country by the applicant organization, products and services of the company in brief.
- Bankers’ certificate from India.
- Identity proof and address proof of all the directors – duly certified by a banker in their home country.
- Details of individuals or companies holding more than 10% of equity.
- Organization structure and its shareholding pattern details.
- Board resolution for opening up bank accounts and signed bank account opening forms of Indian banks.
- Full address of the office of the company in India, which is proposed to be its principal place of business in India.
Have questions about the branch office?
We have you covered:
What is a digital signature certificate (DSC)?
A digital signature is software by which applicants sign documents electronically.. Registrar of companies (ROC) mandates that the directors sign application documents using their digital signature. Hence, a digital signature is required for all directors of a proposed company.
- What is the director identification number (DIN)?
- Is an address proof mandatory?
- What are annual compliance activities required for a branch office?
- What is the eligibility criteria for branch office registration in India?
- Can a foreign company carry out manufacturing or processing activities through its branch office in India?
- How long does it take to register a branch office in India?
- Is it mandatory for a branch office of a foreign company to have a bank account in India?
- What is the minimum capital requirement for branch office registration in India?
- Can a branch office of a foreign company engage in trading activities in India?
- Can a branch office of a foreign company own property in India?
- Can a foreign company have more than one branch office in India?
- Can a branch office of a foreign company convert into a subsidiary in India?
- Can a branch office of a foreign company repatriate profits to its home country?
- Is it mandatory for a foreign company to appoint a local agent for branch office registration in India?
- Can a branch office of a foreign company carry out import/export activities in India?
- What is the validity of the registration of a branch office of a foreign company in India?
- Can a branch office of a foreign company carry out trading activities in India?
- Is it necessary to appoint a resident Indian as a representative of the branch office?