How to form a Branch Office in India?

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:

What are the popular business entities in India for Foreign Companies?

If you are running a foreign entity and thinking to start a new business in India then first you have to choose that which legal entity is best for your business needs and goal. Now days these are the most popular Business entities:

  •                Liaison Office/Representative Office
  •                Project Office
  •                Branch Office
  •                Joint venture companies

Liaison Office/Representative Office

‘Liaison Office’ means a place of business to act as a channel of communication between the Principal place of business or Head Office by whatever name called and entities in India but which does not undertake any commercial /trading/ industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel.

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Project Office:

Project offices are that type of business entities which are incorporated by the foreign companies for as like temporary project or site offices in India. Now a days The Indian Government grants general permission for foreign companies to incorporate project office entity in India.

To Know more about Project Office CLICK HERE:

Branch Office:

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

To Know more about Branch Office CLICK HERE:

Joint Venture Company:

As it seems from its name a joint venture is a new enterprise owned by two or more participants to share markets / intellectual property and its knowledge and its profit too.

It is essentially a medium to long-term contract which is specific and flexible. Though, the joint venture a newly created business enterprise can be represented and its participants can continue to exist as separate firms. It can also be organized as a partnership firm, a corporation or any other form of business organisation which the participating firms choose to select.

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