Unveiling the Process of Establishing a Branch Office in India

In recent times, India has emerged as an alluring business hub, attracting numerous foreign entities eager to tap into its expansive and rapidly growing market. One avenue for foreign entities to establish their presence in India is by setting up a Branch Office. However, not all foreign entities are eligible for this




A Branch Office, as established by a foreign entity, is primarily engaged in manufacturing or trading activities. The scope of a branch office is limited to the following activities:

  1. Import and export of goods.
  2. Rendering professional or consultancy services.
  3. Conducting research work akin to that of the parent company.
  4. Promoting technical or financial collaborations between Indian companies and the parent or overseas group company.
  5. Representing the parent company in India and serving as a buying/selling agent.
  6. Providing Information Technology services and software development.
  7. Offering technical support for products supplied by parent/group companies.
  8. Facilitating the operations of foreign airlines or shipping companies.

This article elaborates on the comprehensive procedure for setting up a branch office in India, providing a definitive guide for foreign entities.


Eligibility Criteria for Establishing a Branch Office

A foreign entity can establish a Branch Office in India if it meets the following criteria:


  1. Demonstrates a profit-making track record over the preceding five financial years in its home country.
  2. Maintains a net worth not less than USD 100,000 or its equivalent. Net worth is calculated as the total of paid-up capital and free reserves, minus intangible assets, as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or a Registered Accounts Practitioner.

Cases Requiring Prior RBI Approval for Branch Office Establishment

An application for opening a branch office in India from a foreign entity necessitates prior approval from the Reserve Bank of India (RBI) in the following instances:


  1. The applicant is a citizen of or is registered/incorporated in Pakistan.
  2. The applicant hails from or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau, and intends to establish a branch office in specific regions of India.
  3. The primary business of the applicant falls within the Defense, Telecom, Private Security, or Information and Broadcasting sectors. However, prior RBI approval is not mandatory if the Government has already granted approval or license/permission through the concerned Ministry/Regulator.
  4. The applicant is an NGO, Non-Profit Organization, Body/Agency/Department of a foreign government. In cases where the entity engages, either partly or wholly, in activities governed by the Foreign Contribution (Regulation) Act, 2010 (FCRA), it must obtain a certificate of registration under the Act and refrain from seeking permission under Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016.

Branch Office Registration Process

1.Submission of Application:

A foreign entity that meets the eligibility criteria can establish a branch office by submitting Form FNC to a designated AD Category-I bank. The application should include the following documents:

  • Attested copy of Certificate of Incorporation/Registration, along with translated Memorandum and Articles of Association.
  • Audited Balance sheet for the last three years.
  • Banker's Report from the applicant's overseas bank.
  • Company profile (in English translation).
  • List of Directors of Parent Company (translated and attested).
  • Power of Attorney (if applicable).
  • Letter of comfort from parent/group company (if required).
  • Lease agreement as proof for Branch Office.

2.Verification and UIN Allotment:

    Upon receipt of documents, the AD Category-I bank conducts a due diligence process, examining the applicant's background, promoter antecedents, and the nature and location of the activity. After approval, the bank forwards the application to the RBI for allotment of a Unique Identification Number (UIN) to the branch office.

    3.Approval and Intimation:

    Following UIN issuance, the AD Category-I bank provides an approval letter to the foreign entity, authorizing the establishment of the branch office in India. The entity must notify the bank of the branch office setup within six months from the approval date. An extension may be granted under exceptional circumstances.

    4. Registrar of Companies (MCA) Registration:

    Within 30 days of establishment, the foreign entity must register the branch office with the Ministry of Corporate Affairs (MCA) through Form FC-1. Required documents include certified copies of the foreign company's constitution, directors' details, RBI approval, and other relevant declarations.

    In Conclusion

    Embarking on the journey of setting up a branch office in India offers foreign entities a strategic foothold to engage in specified trading activities. By meticulously adhering to the outlined procedure and fulfilling the eligibility criteria, foreign entities can ensure a compliant and successful establishment of their branch office in India.





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