• Indian Perspective
• Global Perspective

Setting up Branch Office in India

An Introduction about Opening Branch Office

A company expands its business by opening up its branch offices in various parts of the domestic country as well as in other countries. A branch office refers to an establishment which carries on substantially the same business and activity as is carried out by its Head Office.

Objectives of Setting Up the Branch Office:

• Export of Goods
• 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
• Acting as buying/selling agent in India
• Rendering technical support to the products supplied by parent/group companies
• Foreign Airline/shipping Company

Thus, there is general permission to carry out any or all of the above activities once the permission from RBI is received to set up a BO in India

Remittance of profit or surplus

The branch offices may remit profit of the branch, net of applicable Indian taxes and subject to RBI guidelines.

Documents Required for opening a Branch Office

• Copies of last three years audited Balance Sheet, Profit & Loss Account of the Parent Companies.
• Translated English version of the Company's Certificate of Incorporation/Registration, Memorandum & Articles of Association
• Reasons for opening office in India like business transacted, details of customers, vendors etc.
• Certificate of Incorporation of Parent Company

Our Professional team on receipt of abovementioned documents will proceed further for drafting of necessary documents for Branch Office in India.

Frequent Asked Questions

What is Branch Office?

Sec. 2(9) of the Companies Act, 1956 defines a Branch as follows:
Branch office in relation to a Company means-
(a) any establishment described as a branch by the company; or,
(b) any establishment carrying on either the same or substantially the same activity as that carried out by the head office of the company; or
(c) any establishment engaged in production, processing or manufacture.

How to Start a Branch Office?

Reserve Bank of India has given general permission to start a Branch Office with the following certain activities as mentioned below:

• Export of Goods
• 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
• Acting as buying/selling agent in India
• Rendering technical support to the products supplied by parent/group companies
• Foreign Airline/shipping Company

Any Company wishes to start Branch Office must need to take prior approval from RBI for the above mentioned activities.

What is the Income Tax Rates on Branch Office?

Branch Office is considered as Foreign Company. Taxes applicable for Foreign Companies will be applicable to Branch Office. As of Now Maximum Income Tax rates on Foreign Company is 45% (approx).

Can I Open a Bank Account in the Name of Branch Office?

Branch Office after receiving approval from RBI can proceed further to open a Branch Office in India. Prior to open a Bank Account the Branch office need to obtain PAN NO.

What is Permanent Account No?

Permanent Account Number (PAN) is a national identification number, issued to all taxpayers of India whose income is taxable. This number is issued by the Income Tax Office. The primary purpose of PAN is to prevent tax evasion by keeping a track of monetary transactions.

What is the difference between Branch Office and Liasion Office?

Basis of Difference	Liaison office	Branch Office
Scope of Entity	A Liaison Office is in the nature of a representative office set up primarily to explore and understand the business and investment climate.	An office of a firm which is located somewhere other than the firm's main office location. In other words, a branch is simply another location and is still involved in the business activities of the firm.
Commercial Activities	It cannot do any other commercial activity.	It can do all the other commercial activities.