Branch Office

A foreign company, engaged in manufacturing or trading activities, can set up its business in India by establishing a Branch Office (BO), subject to the compliances of the foreign direct investment (FDI) policy of the Reserve Bank of India (RBI). The main objective to establish a BO is to explore and understand business and investment scenario in India. 
A BO can undertake the following activities:
  • Export / import of goods
  • Rendering professional or consultancy services
  • Carrying out research work, in areas where the parent company is engaged
  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company, etc.
As opposed to a Liaison office, a BO is allowed to earn revenue. 

As per regulation 2(d) of the 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” in relation to a company, means any establishment described as such by the company.


Before making an application to the RBI, entities should fulfill certain eligibility criterions, as mentioned below:

  • They should have a profit making track record during immediately preceding 5 financial years in their home country.
  • They should have net worth not less than USD 1,00,000 or its equivalent. 

A foreign company should apply through a designated Authorized Dealer (AD) Category-I bank to the general manager of the Foreign Exchange Department of the RBI. The process is as follows:

  1. An application is filed in a specified FNC form along with other documents, such as:
    • Customer request letter on the letterhead of the applicant entity;
    • Latest audited Balance Sheet for last 5 years of the applicant entity;
    • English version of the Certificate of Incorporation / Registration or Memorandum & Articles of Association attested by Indian Embassy / Notary Public in the country of registration;
    • Bankers report of the applicant in the host country;
    • CA certificate for certification of net worth and profitability of the applicant entity;
    • Power of Attorney in favour of signatory of Form FNC in case the Head of the overseas entity is not signing the Form FNC.
    • Any other documents, as may be asked by the RBI/AD.
  2. After submitting the above mentioned documents, the entire application is to be reviewed by the bank.
  3. On the basis of the documents and information submitted, the bank may ask for further documents and information, as it may deem fit to process the application.
After the RBI’s approval, there are different kinds of approvals and registrations under other government authorities, such as:
  1. Application for Permanent Account Number (PAN)  
  2. Opening of bank account
  3. Application to ROC for getting a “Certificate of Establishment of Place of Business in India”
  4. Application to the Director General of Police (DGP) of the state concerned, in which LO has established its office, within five working days of the BO becoming functional

The indicative time line is 18 to 20 days from the date of application to the RBI. However, it may take more time as well depending on the complexity of each case.

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