Set up a Branch Office in India

Foreign businesses starting their branch offices in India are allowed to operate in the following sector

• Offering consultancy services or professional services
• Indulge in export or import goods
• Proceed with research work in the field the parent company is engaged
• Acting as a selling or buying agent for the parent company while representing the company in India
• Promotion of financial and technical collaborations with the Indian companies
• Offering services in the field of IT and Software development
• Offering technical support for the parent company product
• Running foreign airline or shipping company

However, as per government regulations, a branch office can’t indulge in manufacturing activities, but they can subcontract their manufacturing needs to an Indian company.

According to the RBI rules, the application for opening a Branch Office in India should be submitted only by an Authorized dealer. An authorized dealer means an institution which has banking licenses. However, have a look at the documents, which are required to open a Branch Office in India.

• Three copies of Form FNC 1
• The letter of authority, issued by a parent company to favour the Local Representative
• A comfort letter from the parent company which is provided in support of the operation in India
• Letter of authority or Resolution from the parent company for building a Branch Office in India
• The letter, issued by the principal officer of the foreign parent company to RBI
• Two copies of the Certificate of Incorporation in English, Memorandum & Articles of association of the parent company, which is attested by the Indian notary public or Indian embassy in the country of registration
• Latest audited balance sheet along with annual accounts of the parent company, which is translated notarized for the past 3 years and adequately authenticated
• Certification of Incorporation- Duly Notarized, Translated and properly authenticated
• Name, email id, address and phone number of the authorized person in the home country
• Organization’s commitment to the effect that it will be open to opinion sought or reported from the banker by the Reserve Bank of India or Government of India
• Details of the Bankers of the Organization including country of origin and bank account number
• The expected funding amount for operating in India
• Details of the activity done by the parent company, in the foreign country including a brief on the product and services of the company
• Address of the proposed Branch Office, how many persons are going to be employed, how many foreigners will be there, and address of the head office of the same Branch Office, located outside India
• Bankers certificate
• Latest identity and address proof of all the Directors, which are properly certified and authenticated by the banker in Home Country
• Resolution for initiating a bank account with the banker
• Structure of the company and its shareholding pattern
• Details of the company of an individual who is holding more than 10% share
• Complete KYC of the shareholder who has 10% stakes on the applicant company
• A signed copy of the bank account opening proof in Indian Bank

RBI approves the license, which is required to open a Branch Office in India. But, according to the latest changes, this application process is not routed through the Authorized Dealers (AD).

Not only the RBI registration, but foreign entities looking to set up branch offices in the country also need to register with the Ministry of Corporate Affairs as well. As the registration gets completed, the Register of Companies allots CIN (Corporate Identity Number) to the branch office. However, the branch office is required to meet certain compliance requirements. Have a look at the list below,

• Filling of Form 44
• Need to furnish memorandum or statutes, charter along with articles of association in the English language
• Details of the directors- individuals
• Director details- corporate bodies
• Approval letter from Reserve Bank of India
• Details of the secretary/secretaries
• Board resolution or power of attorney in favour of the authorized representative.

After successfully incorporating the branch office in India businesses need to get the following things done-

• Getting a Permanent Account Number- PAN
• A Tax Deduction Number- TAN
• Registering with the state police
• GST registrations if the branch is looking to provide any service in the country

Having professional experience for long VJM & Associates LLP can help foreign companies to meet all the registration and compliance needs to set up branch offices in India. If you are looking to set up a branch office in India here is how VJM & Associates LLP can help you,

• Complete assistance with documentation
• Filing the Form FNC to RBI via registered AD Bank
• Digital Signature for the Authorized Signatory
• Getting PAN & TAN for the company
• Support for opening the bank account
• Assistance with GST registration
• Complete support with RoC registration
• Assistance in getting Import Export Code (IEC)
• Help with Government fee and taxation