Opening of Branch Office in India by Foreign Entity
Foreign companies engaged in manufacturing and trading activities abroad are allowed to Opening a Branch Office in India. A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer.
A body corporate incorporated outside India (including a firm or other association of individuals), desirous of opening a Branch Office (BO) in India have to obtain permission from the Reserve Bank under provisions of FEMA 1999 through AD Bank. The applications from such entities in Form FNC will be considered by Reserve Bank under two routes:
Bank under two routes:
• Reserve Bank Route - Where principal business of the foreign entity falls under sectors where 100 per cent Foreign Direct Investment (FDI) is permissible under the automatic route.
• Government Route - Where principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category are considered by the Reserve Bank of India (RBI) in consultation with the Ministry of Finance, Government of India.
The RBI has prescribed following criteria for sanctioning Branch Offices of foreign entities :
The application along with the prescribed documents including shall be forwarded through AD bank to General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office:
In case applicant does not satisfy above criteria and are subsidiaries of other companies can submit Letter of Comfort from their parent company, subject to the condition that the parent company satisfies the eligibility criteria as prescribed.
After proper scrutiny, AD bank shall forward the application together with their comments/ recommendations to the Reserve Bank. Once approved by RBI the Branch office shall be allotted a Unique Identification Number (UIN). They are further required to obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up the offices in India.
Permitted Activities for Branch Office in India:
Branch Offices are permitted to represent the parent/group companies and undertake the following activities in India:
Normally, The Branch Office should be engaged in the activity in which the parent company is engaged. Profits earned by the Branch Offices are freely remittable from India, Subject to payment of applicable taxes.
Contact PKP for more details / documents required for setting up of Brach office in India.
Contact PKP Branch Office in India
Contact Person : Mr. Prakash k Gupta
Email - email@example.com, firstname.lastname@example.org
Telephone Numbers : +91-11-23382207/ 23388753
Mobile Number : +91-9811031841