Set up a Branch Office in India
A foreign company can smoothly begin its operations in India by setting up a Branch Office. To do so, the parent company must obtain prior approval from the Reserve Bank of India (RBI) and complete the registration process with the Registrar of Companies (RoC). Since a Branch Office is treated as a foreign entity, it is subject to a higher income tax rate, which can go up to 40%.
Before initiating the registration, it is important for the company to ensure it meets the eligibility criteria. The application needs to be submitted through an Authorized Dealer (AD) Category 1 Bank. In cases where the applying company is a subsidiary and doesn’t meet the required eligibility conditions, the parent company must issue a Letter of Comfort (LOC) to support the application.
At Value Recruiters, we help streamline the entire process of setting up a Branch Office in India. From handling RBI approvals and coordinating with the AD Bank to completing RoC formalities, we ensure smooth and compliant setup for foreign companies looking to expand into the Indian market.
FAQs
Requirements for Setting Up a Branch Office in India
Any foreign company that meets the basic eligibility criteria can establish a Branch Office in India. However, there are certain key conditions that must be fulfilled:
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Same Name as Parent Company: The name of the Indian Branch Office must be identical to that of the foreign parent company.
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Profit Track Record: The foreign entity should have a consistent and profitable financial track record for the last five consecutive years.
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Financial Support from Parent Company: If the Branch Office does not generate any revenue in India, then all financial obligations must be supported and fulfilled by the parent company.
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Minimum Net Worth Requirement: As per the latest audited balance sheet or a certified statement by a registered accountant, the total paid-up capital or net worth must be at least USD 100,000 or its equivalent.
Permitted Operations of Branch Offices in India
Foreign companies opening a Branch Office in India can engage in several approved business activities. These include:
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Providing consultancy or professional services
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Importing or exporting goods
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Conducting research in areas where the parent company is active
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Acting as a buying or selling agent, while representing the parent company in India
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Promoting financial or technical collaborations with Indian companies
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Providing IT and software development services
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Offering technical support and assistance for the parent company’s products
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Operating as a foreign airline or shipping company
Required Documents to Set Up a Branch Office in India
To establish a Branch Office in India, foreign companies must apply through an Authorized Dealer (AD) bank—a bank licensed by the Reserve Bank of India (RBI). The process is documentation-heavy and requires careful preparation. Below is the full checklist of essential documents as per RBI guidelines:
Key Documents Checklist:
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Three copies of Form FNC 1
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Letter of Authority issued by the parent company in favor of the local Indian representative
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Letter of Comfort (LOC) from the parent company supporting the Indian operations
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Board Resolution or official letter from the parent company for establishing the Branch Office
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Letter from the Principal Officer of the parent company addressed to the RBI
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Two copies of the Certificate of Incorporation, Memorandum & Articles of Association
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Must be in English
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Must be notarized by Indian Notary Public or attested by the Indian Embassy in the country of origin
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Latest Audited Balance Sheet & Annual Accounts of the parent company (last 3 years)
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Should be translated, notarized, and authenticated
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Certificate of Incorporation – properly notarized, translated, and authenticated
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Contact Details of Authorized Person in the home country (Name, Email, Phone, Address)
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Declaration/Undertaking by the organization agreeing to RBI/Government queries or opinions from the banker
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Bank Details of the parent company, including:
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Country of origin
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Bank account number
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Expected funding amount for operations in India
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Brief overview of business activities and product/services details of the parent company
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Proposed Address of the Branch Office in India
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Number of employees (Indians & foreigners)
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Address of overseas head office of the Branch
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Banker’s Certificate
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Certified ID and Address Proof of all Directors
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Must be authenticated by the banker in the home country
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Board Resolution for opening a bank account in India
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Company Structure & Shareholding Pattern
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Details of Shareholders holding more than 10%
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Full KYC of significant shareholders (10% or more ownership)
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Signed Proof of Indian Bank Account Opening
Other Mandatory RoC Compliance Requirements for Branch Offices in India
Getting approval from the Reserve Bank of India (RBI) is just the first step in setting up a branch office in India. Once that’s in place, foreign companies also need to register their branch office with the Ministry of Corporate Affairs (MCA). This step is crucial because it gives your branch a legal identity in India through a Corporate Identity Number (CIN) issued by the Registrar of Companies (RoC).
To complete this process, several documents and formalities must be fulfilled. Here’s what you’ll need:
List of RoC Compliance Requirements:
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Filing of Form 44
– This form is used to register a foreign company’s presence in India. -
Submission of Charter Documents
– You must provide the Memorandum of Association (MOA), Articles of Association (AOA), or any equivalent charter/statute of the parent company.
– All documents must be submitted in English. -
Director Details – Individual Level
– Full personal details (name, address, contact) of the directors representing the foreign parent company. -
Director Details – Corporate Bodies
– If any of the directors are corporate bodies themselves (rather than individuals), their complete company details are required. -
RBI Approval Letter
– The official approval document received from the Reserve Bank of India. -
Secretary/Secretaries’ Details
– Information about the company secretary/secretaries, if applicable. -
Board Resolution / Power of Attorney
– A duly signed resolution or Power of Attorney authorizing a local representative to act on behalf of the foreign company in India.
Services for Foreign Companies
Business setup in India
With global economic momentum shifting toward emerging markets, India emerges as a strategic hub for international business expansion. Recognized as one of the world’s fastest-growing economies, India presents a wealth of opportunities for global enterprises. However, to truly unlock its potential, having a local physical presence is essential. Choosing the most suitable mode of entry—be it a Branch Office, Liaison Office, or Project Office—can significantly influence long-term success and operational effectiveness.
Liaison Office
A foreign company can establish a strong foothold in India by setting up a Branch Office, acting as an operational arm of its international structure. Before commencing operations, the parent company must obtain approval from the Reserve Bank of India (RBI) and register with the Registrar of Companies (RoC). As mandated under the FEMA Act, 1999, any entity incorporated outside India must secure RBI approval to ensure full compliance with Indian regulations. This facilitates a seamless business launch and enables direct engagement in permitted commercial activities.
Branch Office
For foreign companies aiming for a time-bound or contract-specific operation, a Project Office serves as the most efficient entry route. Ideal for executing project-based engagements, this structure requires prior approval from the RBI and registration with the RoC. Without needing to incorporate a subsidiary, this model allows foreign firms to maintain a temporary presence aligned with the project’s lifecycle. It offers operational ease, reduced administrative overhead, and streamlined compliance, making it perfect for short-term, focused business objectives in India.
Transfer Pricing
Transfer pricing involves determining the character, treatment, and taxability of transactions between related entities situated in various countries. It is critical in ensuring that such inter-company dealings occur at arm’s length—i.e., at prices comparable to those charged between unrelated parties under similar circumstances. By using approved transfer pricing methods, tax authorities can fairly assess profit distribution and taxation in each jurisdiction. This prevents base erosion, limits profit shifting, and promotes global tax transparency, while helping multinational enterprises remain aligned with international tax laws and compliance frameworks.
FEMA Advisiory
If you’re looking for a dependable partner or trusted FEMA advisor, we’re here to support you. Our team of skilled FEMA consultants delivers tailored, end-to-end compliance solutions to meet your specific needs. We also cover essential services such as accounting, bookkeeping, GST filings, and financial reporting. With hands-on expertise and a forward-thinking approach, we keep your business aligned with evolving FEMA regulations. We ensure timely execution, complete compliance, and seamless coordination with authorities—allowing you to focus on growth while we manage the regulatory complexities for you.
Taxation of Expatriates
We are proud to lead the way in providing premium accounting and reporting solutions designed for the dynamic modern business environment. In an era defined by rapid tech evolution, digitalization, cloud-based tools, online compliance, and increased regulatory vigilance, our services ensure speed, accuracy, and dependability. From bookkeeping to GST filing and statutory reporting, we align your business with best practices and local norms. With a focus on precision, transparency, and adaptability, we help businesses thrive by managing numbers that truly matter in a constantly shifting financial world.