Branch Office Registration in India
India is a rapidly growing market that continues to attract foreign investors and multinational corporations from around the world. One of the most profit-generating ways for a foreign company to establish a presence in India is through a Branch Office. Unlike liaison offices, which are limited to communication and representation, branch offices are allowed to conduct several commercial and operational activities, including trading, consultancy, research, and more.
A Branch Office acts as an extension of the foreign parent company, and not as a separate legal entity. It operates under the name of the parent company, and it must comply with Indian regulations, including those under the Foreign Exchange Management Act (FEMA), the Companies Act, 2013, the Income Tax Act, 1961, and other relevant laws. The branch office is ideal for foreign companies that wish to directly access the Indian market without incorporating a subsidiary.
What is a Branch Office?
A Branch Office is a business establishment opened by a company incorporated outside India, to carry out specific permitted activities in India. The branch office is not a separate legal entity but a direct extension of the foreign parent company. A branch office can conduct business activities in India, generate revenue, and remit profits back to the parent company, subject to the laws of India.
Advantages of Opening a Branch Office in India
- Direct Market Access and Control: A branch office serves as an extension of the parent company, enabling direct engagement with the Indian market and maintaining complete operational control over strategy and decision-making for the business.
- Cost and Efficiency Benefits: A Branch Office often requires lower cost and less paperwork compared to setting up a subsidiary, as incorporation in India is not necessary.
- Brand Continuity: The branch operates under the same name and branding as the parent company, which preserves its brand identity and recognition.
- Revenue Generation and Profit Remittance: A Branch Office can conduct trading and income-generating activities in India. Profits can be repatriated to the parent company after paying applicable Indian taxes.
Branch Office vs Liaison Office vs Project Office
Feature |
Branch Office |
Liaison Office |
Project Office |
Revenue Generation |
Yes |
No |
Yes (for specific project) |
Business Activities |
Limited commercial |
Non-commercial |
Limited to project execution |
Taxable |
Yes |
No (generally) |
Yes |
RBI Approval |
Required |
Required |
Required |
Can Sign Contracts |
Yes |
No |
Yes (project-specific) |
Legal Framework Governing Branch Offices in India
Branch Offices in India are governed primarily by:
- Foreign Exchange Management Act (FEMA), 1999
- RBI Master Direction on Establishment of Liaison Office / Branch Office / Project Office or any other place of business in India
- Companies Act, 2013 (Sections 380 and 381)
- Income Tax Act, 1961
- Goods and Services Tax (GST) Law
Regulatory Authorities Involved in Setting Up a Branch Office in India
Several regulators oversee the Branch Office registration and functioning:
- Reserve Bank of India (RBI)- Grants permission under FEMA
- Ministry of Corporate Affairs (MCA)- For compliance and registration
- Registrar of Companies (ROC)- For incorporation formalities
- Authorized Dealer Bank- Acts as a channel to file an application to the RBI
- Income Tax Department- For PAN, TAN, and taxation
Who Can Set Up a Branch Office in India?
Only foreign companies engaged in manufacturing or trading activities abroad are permitted to set up a branch office in India.
Eligibility Criteria |
Requirement |
Corporate Form |
Must be a foreign incorporated entity (not a sole proprietor) |
Profit History |
Profitable for 5 consecutive financial years |
Net Worth |
Minimum USD 100,000 (paid-up capital + free reserves – intangible assets) |
Permissible Sector |
Principal business under 100% Automatic Route FDI (if applicable) |
Letter of Comfort |
Required if the entity lacks net worth/profit but is backed by a qualifying parent |
Regulatory Exemptions |
Foreign banks, insurers, and companies in Special Economic Zones (SEZs) may have simplified routes. |
Security Clearance |
Necessary for entities from certain countries/regions |
Permitted Activities for a Branch Office in India
Branch Offices are permitted to undertake only those activities that align with the core activities of their parent company and fall under the approval of the Reserve Bank of India. The activities include:
- Export/Import of Goods: Branch Offices can engage in the export or import of goods and conduct trading activities, strictly on a wholesale basis, not for retail sales.
- Professional or Consultancy Services: The Branch office can provide professional services, including engineering, IT, legal, and management consulting.
- Research and Development: Research and development in the field of the parent company's business can be undertaken by its branch office.
- Technical or Financial Collaborations: A Branch Office can facilitate technical collaborations between the parent company and Indian companies, such as joint ventures, technology transfers, or financial partnerships between the parent and Indian companies.
- Representation Role: The branch office can serve as the parent company's local representative and act as a buying and selling agent in India on behalf of the parent company.
- Information Technology and Software Services: Software development, IT-enabled services, testing, and other tech services are allowed to be carried out by the Branch Office.
- Technical Support Services: Post-sales support services, including installation, warranty servicing, etc., for products supplied by the parent company.
- Representation for Foreign Airlines or Shipping Companies: The branch can represent international airlines or shipping lines in India, offering services such as ticketing, cargo operations, and customer support.
Prohibited Activities for a Branch Office
The Branch office is not permitted to perform the following activities in India:
- Retail trading of any nature
- Direct manufacturing or processing activities (unless outsourced to an Indian manufacturer)
- Real estate business, including buying and selling of properties
- Banking and insurance (except with prior approval from regulatory bodies)
- Any activity not explicitly approved by the RBI
Documents Required for Setting Up a Branch Office in India
For RBI Approval (via Authorized Dealer Bank)
- Form FNC: Application form prescribed by the RBI
- Board Resolution of the parent company approving the setup of a branch office in India
- Certificate of Incorporation of the parent company- Notarized and apostilled
- Memorandum of Association (MOA) and Articles of Association (AOA) of the parent company- Notarized and apostilled
- Audited Financial Statements of the parent company for the last five financial years
- Net Worth Certificate of the parent company from a Certified Public Accountant (CPA) or Chartered Accountant (CA)
- KYC Documents of the authorized signatory, such as a passport copy, photograph, and address proof
- Details of Directors/Key Executives and their Passport copies, photographs, and addresses
- Letter of Comfort (if applicable) from the parent company- in case of a shortfall in the net worth/profit requirement
- Power of Attorney (PoA) or Board Resolution in favour of the local authorized representative in India
- Details of Proposed Activity to be carried out by the Branch Office in India
- Proof of Registered Office Address in India, such as a lease agreement/ownership deed and utility bill
For Registration with the Registrar of Companies (ROC)
Once you receive approval from the RBI, attach the following documents to the Registrar of Companies:
- RBI Approval Letter: Granted via AD Category-I Bank
- Form FC-1: Application for establishment with ROC
- Notarized and Apostilled Charter Documents: Certificate of Incorporation, MOA, and AOA
- List of Directors of the foreign parent company
- Details of the Indian Authorised Representative, along with ID and address proof
- Board Resolution authorizing the opening of a branch in India and appointing representatives
- Proof of Office Address in India, such as a lease/rent agreement, utility bill not older than 2 months
- A declaration from the Authorised Representative in India affirming compliance
Additional Registrations (Post-Approval)
After successful registration:
- PAN Card application- mandatory for tax compliance
- TAN Number for TDS deductions
- GST Registration- if the business is supplying taxable goods/services
- Import Export Code (IEC) from DGFT- if the business is engaged in import/export
- Professional Tax, Shops & Establishments Registration, if applicable locally
- Bank Account Opening Documents (e.g., board resolution, KYC, RBI letter, etc.)
Process of Branch Office Registration in India
Follow the steps below for Branch Office Registration in India:
Step 1: Appoint a Local Representative and Obtain DSC/DIN (Optional)
Before starting the registration process, the foreign company should appoint an Indian resident as its authorized representative, and the representative must have a Digital Signature Certificate (DSC) and a Director Identification Number (DIN), as these credentials are used for online filings of forms with the Ministry of Corporate Affairs (MCA) and taxation purpose.
Step 2: Submit Form FNC through an AD Category-I Bank
The foreign parent company must submit Form FNC (Form for New Company) along with supporting documents to an Authorized Dealer Category-I Bank (commonly referred to as an AD Bank). An AD Bank is a bank in India authorized by the Reserve Bank of India (RBI) to engage in foreign exchange transactions under the Foreign Exchange Management Act, 1999 (FEMA). AD Bank acts as an intermediary between the RBI and the parent company. The AD Bank verifies the Know Your Customer (KYC) credentials of the foreign entity by contacting the parent company's banker in its home country and then forwards the application to the Reserve Bank of India (RBI) for review and approval.
Step 3: Obtain RBI Approval and UIN
The RBI reviews the application based on the foreign company’s business activity and country of origin:
- If the parent company belongs to a country where 100% Foreign Direct Investment (FDI) is allowed under the automatic route, and the proposed activities fall under the permitted sectors, the AD Bank itself may grant the approval on the RBI’s behalf.
- If the activity or sector requires prior clearance, such as telecom, defence, broadcasting, or the parent company is based in a country not under the automatic route, the RBI processes the application directly.
Once the application is approved, the RBI (or AD Bank) issues a Unique Identification Number (UIN), which authorizes the foreign company to open a branch in India. This UIN is generally valid for a limited period (typically six months), within which the company must complete the registration with the Registrar of Companies (RoC).
Step 4: Register the Branch Office with the ROC (Form FC-1)
Within 30 days of receiving approval from the RBI, the foreign company must register its branch office with the Registrar of Companies (RoC) by filing Form FC-1 on the MCA portal at www.mca.gov.in.
Attach the following documents with the Form FC-1:
- Copy of RBI approval letter (UIN)
- Notarized and apostilled Certificate of Incorporation, Memorandum of Association (MoA), and Articles of Association (AoA) of the parent company
- List of directors and shareholders (holding more than 10% stake) of the parent company
- Board Resolution or Power of Attorney authorizing the branch office and appointing an Indian representative
- Proof of the branch office address in India (e.g., rent agreement and utility bill)
- Passport copy or PAN and address proof of the authorized representative in India
The application must be digitally signed, and the prescribed fee of ₹6,000 (subject to change) must be paid online. Delays in filing the application on time may attract penalties.
Step 5: Post-Registration Formalities and Tax Compliance
Once the ROC issues the Certificate of Establishment, the branch office must obtain various other registrations:
- PAN (Permanent Account Number)
- TAN (Tax Deduction and Collection Account Number)
- GST Registration
- Import–Export Code (IEC)
- Open a Bank Account in India by using the ROC Certificate, PAN, and other documents.
- Other Local Registrations, if applicable:
- Shops and Establishments registration under respective State laws
- Professional Tax registration
- Labour law registrations like ESIC, EPFO
- Police clearance/registration for companies originating from certain countries
Step 6: Comply with Ongoing Regulatory Requirements
Once set up, the branch office must comply with all Indian regulatory requirements. These include:
- Filing an Annual Activity Certificate (AAC) with the AD Bank and the RBI, certified by a Chartered Accountant
- Filing Form FC-3 (details of business places in India) and Form FC-4 (annual return of the foreign company) with the MCA
- Filing Income Tax Returns (ITR-6) annually and maintaining proper books of accounts
- Complying with GST returns and TDS returns, as applicable
- Renewing Shops & Establishment License and other state-specific registrations on time
Why Choose Kanakkupillai for Branch Office Registration in India?
When it comes to setting up a branch office in India, Kanakkupillai stands out as a reliable and trustworthy partner for compliance. We provide:
- Expertise with RBI & FEMA Regulations: Our team has hands-on experience dealing with RBI approvals, AD Bank liaisoning, and FEMA regulations, ensuring your application is not delayed or rejected due to procedural gaps.
- End-to-End Advisory Support: We assist you from planning to documentation, including RBI filing, ROC registration, tax registrations (PAN, TAN, GST), and post-setup compliance —all under one roof.
- Customized Service: We understand that every business is unique and has its own distinct objectives. Therefore, we provide customised solutions that align with your parent company’s business goals and regulatory scope in India.
- Speed and Accuracy: Our professionals work efficiently to minimise delays and ensure timely registration, especially under automatic and approval routes with the RBI.
- Transparent Pricing: We maintain clear, upfront cost structures with no hidden fees and no overcharging—just value-driven service at every step.
- Post-Setup Compliance Made Easy: Our Service doesn’t end at setting up a Branch Office. We provide ongoing support with Annual Activity Certificates (AACs), ROC filings (FC-3, FC-4), TDS, ITRs, GST, and other compliance requirements, making it easy for you.
Frequently Asked Questions
Which law regulates Branch Offices in India?
Branch Offices are governed by FEMA 1999, RBI guidelines, the Companies Act, 2013, and the Income Tax Act, 1961.Who can set up a Branch Office in India?
Foreign companies with a consistent profit track record of at least 5 years and a net worth of at least USD 100,000 can establish a Branch Office in India.What activities can a Branch Office perform in India?
Import/export, consulting, IT and software services, R&D, technical support, and representation of airlines or shipping companies.Can a Branch Office undertake retail trading?
No, retail trading and direct manufacturing are not permitted unless outsourced.Is prior RBI approval compulsory for setting up a Branch Office in India?
Yes. Either directly from the RBI or through an Authorised Dealer (AD Category-I Bank).Is it mandatory to register with the Registrar of Companies (RoC)?
Yes. Form FC-1 must be filed with the RoC within 30 days of RBI approval.What is the tax rate applicable to Branch Offices?
They are taxed at 40% (plus surcharge and cess), similar to foreign companies under the Income Tax Act.Can a Branch Office sign contracts in India?
Yes, unlike a liaison office, a Branch Office can legally enter into contracts on behalf of its parent company.What makes Us Different

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