Branch Office (BO) of a Foreign Company

An India presence without a separate company

A branch office lets an established foreign company operate in India as an extension of itself, rather than as a separate Indian entity. Unlike a liaison office, a branch can earn revenue from the activities the Reserve Bank permits — exports and imports, professional or consultancy services, research, and representing the parent and acting as its buying or selling agent. For a mature company that wants to deliver and bill in India under its own name without incorporating a subsidiary, a branch office is the right structure.

Adv. Bhawna Yadav and her team manage the entire setup at a flat USD 2,500, including the Reserve Bank approval the branch route requires.

What a branch office can and cannot do

A branch can carry out the notified, permitted activities and repatriate its post-tax profits to the parent — a real operating presence. What it cannot do is manufacture or process goods directly (that must be subcontracted), or undertake retail trading. It is, in essence, the parent company doing permitted business in India directly, which is both its strength and its limitation. If your plan involves manufacturing or the full range of business activity, a wholly-owned subsidiary is the better fit, and we will say so before you commit.

Eligibility — the parent's track record matters

The branch route is reserved for established companies. The parent typically needs a profit-making track record over the immediately preceding five financial years in its home country, and a net worth of at least USD 100,000, evidenced by audited accounts. If your company is younger or smaller than this, a subsidiary — which carries no such track-record test — is usually the route, and we will steer you there rather than waste time on an application that will not clear.

Reserve Bank approval is part of the process

A branch office is established with the approval of the Reserve Bank of India, routed through an authorised dealer bank. This is the step that makes the timeline longer than a subsidiary's — typically six to ten weeks — because it depends on the regulator and the bank, not on us. What we control is the quality of the application: we prepare it to match the Reserve Bank's checklist precisely, so it is not bounced back for avoidable reasons. We also coordinate with your authorised dealer bank throughout, because the bank is the channel for both the application and the eventual remittances.

What setting up involves

We confirm the parent's eligibility, prepare the application and the parent-company documents, route it through the authorised dealer bank to the Reserve Bank, and follow the approval through. Once approved, we complete the registration of the branch as required and help with the tax registrations and bank account so the branch can begin operating. From your side, the parent's documents — incorporation, audited financials, a net-worth certificate, and a board resolution — must be apostilled in your home country against our checklist.

Branch, subsidiary or liaison — getting the choice right

This is the decision that matters most, and it is worth a short conversation before any filing. A liaison office cannot earn revenue; a branch can, within limits; a subsidiary can do everything but is a separate company with its own compliance. We will lay out the trade-offs for your specific plans — revenue, activities, liability, timeline and cost — and recommend the structure that actually fits, at a flat fee and with no upselling.

Timeline and what to expect

A branch office takes longer to establish than a subsidiary — typically six to ten weeks — because it requires the approval of the Reserve Bank of India, routed through your authorised dealer bank. That part of the timeline is in the regulator's hands, not ours. What we control is the quality and completeness of the application, which is the single biggest factor in whether it clears first time or comes back with queries. We prepare it to the regulator's checklist, keep your bank moving, and follow the approval through, while you arrange the apostille of the parent's documents in your home country.

Taxation and repatriation

A branch office is taxed in India on the income it earns here, generally at the rate applicable to a foreign company, and it can repatriate its post-tax profits to the parent. Because a branch is an extension of the parent rather than a separate entity, its tax position interacts with the parent's home-country position and the relevant treaty; this is where coordinating legal structure with tax advice matters, and we work alongside your tax advisor so the two align. We also make sure the permitted-activity boundary is understood, because earning income outside the approved activities is the most common way a branch gets into difficulty.

Ongoing compliance

A branch office files an annual activity certificate and meets ongoing reporting and tax obligations. None of it is heavy, but it is recurring, and it is easy to lose track of from abroad. We can carry the branch's compliance for you so it stays in good standing, and we plan the closure cleanly if and when you decide to convert to a subsidiary or wind the branch up.

Who the branch route suits

The branch office is at its best for an established company that wants to deliver permitted services, conduct research, or run an export-import or representative-and-agency operation in India under its own name, without forming a separate company. If that describes you and your parent meets the track-record test, it is an efficient route — and one we handle end to end, with a named advocate and her team, at a flat fee and no upselling.