As a Branch Office (“BO”) in India, foreign companies can conduct full-fledged business in India. BO can carry the same or substantially the same trading activities as carried out by their parent or group companies.
Governing Authority-For establishing a Branch Office in India, approval of the Reserve Bank of India shall be required. The application in the prescribed form for seeking permission to establish a Branch office in India shall be forwarded to Reserve Bank India through an AD Category – I Bank.
Governing Law– Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (Establishment in India of branch or office or other places of business) Regulations, 2000.
- A profit-making track record during the immediately preceding five financial years in the home country.
- Net Worth,e. total of paid-up capital and free reserves less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name, of not less than USD 1,00,000 or its equivalent.
Time Period-There is no particular time limit as to the duration of the Branch Office. The Branch Office shall continue to operate in India till the same is wound up under the provisions of law.
- Export/ Import of goods;
- Rendering professional or consultancy services;
- Carrying out research work, in areas 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 agent in India;
- Rendering services in information technology and development of software in India;
- Rendering technical support to the products supplied by parent/group companies;
- Foreign airline/ shipping company.
A Branch Office is not allowed to carry out manufacturing, processing activities directly/indirectly.
Closure of Branch Office
For closure of Branch office request for closure is required to be made to RBI through AD Category -1 Bank.