Can Foreign Companies Set Up Branch In India?
By Team Legistify / 2016-05-24
Foreign companies, as they grow, seek to expand their business over the globe. The establishment of branch offices herein referred to as BOs, achieves this strategic growth. This article explains the route to be taken by these foreign companies in establishing their branches and the compliance to be met in the process, focusing solely on the establishment of Branch Offices and not Liaison or Project Offices.

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The company incorporated outside India and engaged in a business of manufacturing or trading is permitted to open a branch office in India with specific approval from Reserve Bank of India (RBI).

Foreign companies, including USA companies, are allowed to set up Branch Offices in India

  • Export/Import of goods
  • Rendering professional or consultancy services
  • Carrying out research work, 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 agents in India.
  • Rendering services in Information Technology and development of software in India.
  • Rendering technical support to the products supplied by the parent/ group companies.
  • Foreign airline/shipping company
  • Foreign Banks

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

Annual Compliance Activities required for a Branch Office

Foreign companies, as they grow, seek to expand their business over the globe. The establishment of branch offices herein referred to as BOs, achieves this strategic growth. This article explains the route to be taken by these foreign companies in establishing their branches and the compliance to be met in the process, focusing solely on the establishment of Branch Offices and not Liaison or Project Offices.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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