Activities permitted :
a) Export/import of goods.
b) Rendering professional or consultancy services.
c) Carrying out research work in which the parent company is engaged.
d) Promoting technical or financial collaborations between Indian companies and parent
or overseas group company.
e) Representing the parent company in India and acting as buying/ selling agent in India.
f) Rendering services in Information Technology and development of software in India.
g) Rendering technical support to the products supplied by parent/group companies.
h) Representing a foreign airline/shipping company.
A branch office cannot carry out manufacturing activities on its own but can subcontract
these to any manufacturer based in India. Branch Offices can remit the profits to its parent
company after paying taxes on the same (RBI).
Basic rules :
• All the expenses of the BRANCH office are met by the head office, if it does not have
the revenue from Indian operations.
• The foreign parent company planning to setup a Branch office should have a
profitable track record during immediately preceding 5 years.
• The Net worth of the foreign company should be more than or equal to USD 100,000.
• Net Worth: Total of paid-up capital and free reserves, less intangible assets as per the
latest Audited Balance Sheet or Account Statement certified by a Certified Public
Accountant or any Registered Accounts Practitioner by whatever name called.
• An applicant that is not financially sound and is a subsidiary of another company may
submit a Letter of Comfort (LOC) from its parent/ group company, subject to the
condition that the parent/ group company satisfies the prescribed criteria for net worth
Document Checklist :
The application for forming a branch office is to be given to the AD Category – I bank (i.e. an
AD Category – I bank identified by the applicant with whom they intend to pursue banking
relations) in India. The bank then submits the application to RBI for approval
The following documents are required to open a branch office in India:
• A Indian resident who will be responsible for branch operations and will be liable to
make the tax payments and regular compliances
• Form FNC 1 (Three copies)
• Letter from the principal officer of the Parent company to RBI.
• Letter of authority from the parent company in favor of Local Representative.
• Letter of authority/ Resolution from parent company for setting up BRANCH office
• Comfort letter from the parent company intending to support the operation in India, if
• Two copies of the English version of the Certificate of Incorporation, Memorandum
& Articles of association (Charter Document) of the parent company duly attested by
the Indian embassy or notary public in the country of registration.
• Certification of Incorporation, Memorandum & Articles of association (Charter
Document) – Translated & Duly Notarized and properly authenticated.
• The Latest audited Balance sheet and annual accounts of parent company duly
Translated notarized for past Three years and properly authenticated
• Name, Address, email ID and telephone number of the authorized person in Home
• Details of Bankers of the Organization the Country of Origin along with the bank
• Details Relating to address of the proposed local office, number of persons likely to
be employed, number of Foreigners among such employees and address of the head of
the Local office, if decided
• Details of Activity carried out in Home Country by the applicant organization in brief
about the product and services of company in Brief.
• Bankers Certificate/Report from the bank of the parent company about the details of
parent company and duration of banking with parent company
• Latest Proof of identity of all the Directors – Properly Certified by Banker in Home
Country and duly authenticated
• Latest Proof of address all of Directors – Properly Certified by Banker in Home
Country and duly authenticated
• Structure of the Organization and its Shareholding pattern
• Complete KYC of Shareholders holding Equity in the Applicant Company
Process to be followed by AD Banker :
AD Category-I bank shall forward a copy of the Form FNC along with the details of the
approval proposed to be granted by it to the General Manager, Reserve Bank of India, CO
Cell, New Delhi, for allotment of Unique Identification Number (UIN) to each BO. After
receipt of the UIN from the Reserve Bank, the AD Category-I bank shall issue the
approval letter to the non-resident entity for establishing BO in India.
An applicant that has received permission for setting up of a BO shall inform the
designated AD Category I bank as to the date on which the BO has been set up. The AD
Category I bank in turn shall inform Reserve Bank accordingly
The approval granted by the AD Category I bank should include a proviso to the effect
that in case the BO for which approval has been granted is not opened within six months
from the date of the approval letter, the approval shall lapse. In cases where the nonresident
entity is not able to open the office within the stipulated time frame due to reasons
beyond its control, the AD Category-I bank may consider granting extension of time for a
further period of six months for setting up the office. Any further extension of time shall
require the prior approval of Reserve Bank of India in this regard
Annual Compliance with Registrar of Companies(RoC)
Every year a branch office is required to undertake the following activities:
• Book Keeping
• Annual activity Certificate with RBI
• Filling of financials with Registrar of Companies
foreign company shall, within thirty days of the establishment of its place of
business in India, deliver to the Registrar for registration in Form FC-1—
a) a certified copy of the charter, statutes or memorandum and articles, of the company
or other instrument constituting or defining the constitution of the company and, if the
instrument is not in the English language, a certified translation thereof in the English
b) the full address of the registered or principal office of the company;
c) a list of the directors and secretary of the company containing such particulars as may
d) the name and address or the names and addresses of one or more persons resident in
India authorised to accept on behalf of the company service of process and any
notices or other documents required to be served on the company;
e) the full address of the office of the company in India which is deemed to be its
principal place of business in India;
f) particulars of opening and closing of a place of business in India on earlier occasion
g) declaration that none of the directors of the company or the authorised representative
in India has ever been convicted or debarred from formation of companies and
management in India or abroad; and
h) any other information as may be prescribed.
After submission of above document, RoC will issue Certificate of Registration.
After Incorporation, the following registrations are also necessary for a branch office:
• Permanent account number – PAN
• Tax deduction number – tan number Shop & establishment
• Registration GST Registration if providing services to Indian Customers