Author Profile

Legal News

Posted On by &filed under Legal Tips.


Branch office is that type of business entity which helps to expands business in the different parts of the country and in many different countries too. It refers to an establishment which carries on substantially the same business and activity as is carried out by its Head Office. it establish with the approval of RBI

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

  • Export/Import of goods
  • Rendering professional or consultancy services
  • Carrying out research work, in which the parent company is engaged.
  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
  • Representing the parent company in India and acting as buying/selling agents in India.
  • Rendering services in Information Technology and development of software in India.
  • Rendering technical support to the products supplied by the parent/ group companies.
  • Foreign airline/shipping company
  • Foreign Banks

 

Advantages:

  • Can perform some revenue generating activities in India, unlike a liaison office (see below).
  • It is a separate legal entity for certain purposes.

 

Disadvantages:

  • Restrictions on range of activities, which are subject to RBI approvals.
  • Formalities and legal set-up costs are involved.

 

Procedure for setting up Branch office?

  • Reserve Bank permits companies engaged in manufacturing and trading activities abroad to set up Branch Offices in India for the following purposes:
  • To represent the parent company/other foreign companies in various matters in India e.g. acting as buying/selling agents in India
  • To conduct research work in the area in which the parent company is engaged
  • To undertake export and import activities and trading on wholesale basis
  • To promote possible technical and financial collaborations between the Indian companies and overseas companies.
  • Rendering professional or consultancy services
  • Rendering services in Information technology and development of software in India
  • Rendering technical support to the products supplied by the parent/Group companies.
  • A branch office is not allowed to carry out manufacturing, processing activities directly/indirectly. A Branch Office is also not allowed to undertake Retail Trading activities of any nature in India. Branch Offices have to submit Activity Certificate from a Chartered Accountant on an annual basis to the Central Office of FED. For annual remittance of profit Branch Office may submit required documents to an authorised dealer.
  • Permission for setting up branch offices is granted by the Reserve Bank of India. Reserve Bank of India considers the track record of the Applicant Company, existing trade relations with India, the activity of the company proposing to set up office in India as well as the financial position of the company while scrutinising the application.

 

To form a Branch Office in India just fill this form:


Leave a Reply

Be the First to Comment!

Notify of
avatar
wpDiscuz