Opening Branch in India

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Opening a Branch in India

Types and Options for Foreign Investors Doing Business in India

Branch in India

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

•  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).

Branch office on 'Stand Alone basis" in India

Stand Alone Branch Offices are isolated and restricted to the Special Economic Zone (SEZ) alone and no business activity/transaction is allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India.

No approval is necessary from RBI for a company to establish a branch/unit in SEZs to undertake manufacturing and service activities subject to specified conditions.

Liaison Office/Representative Office

A Liaison Office could be established with the approval of the government of India. The role of Liaison Office is limited to collection of information, promotion of exports/imports and facilitate technical/financial collaborations.

Liaison office cannot undertake any commercial activity directly or indirectly.

Project Office

Foreign companies planning to execute specific projects in India can set up a temporary project/site offices in India for carrying out activities only relating to that project. The Government of India has now granted general permission to foreign entities to establish project offices subject to specified conditions.

Foreign investors planning to open a branch in India are required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See our FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties &  the Joint Ventures in India

Check 2 more links from net.

Procedure for Opening Branch Office by Foreign Companies

Procedure for Opening Branch Office by Foreign Companies--2                    

Dear Neeta,

In addition to Mr. Ankur Sir, I enclosed hereto an article which provides procedural aspects for opening branch office and liasion office in India by foreign Company.

Dear Neeta,

I could not upload that file.

can you provide your mail ID then i will forward it to you.

RBI/2009-2010/279
A. P. (DIR Series) Circular No.24

and RBI/2009-2010/278
A. P. (DIR Series) Circular No. 23.

The above two circulars must be analysed for procedural aspects as issed by the RBI on 30th December,2009.

Kindly get back for any further help.

Thanks & Regards

Hello members

thanx for the replies , Mr. Mani plz forward the article to neeta_cs2009 @ yahoo.com.

Thanx and regards

Neeta.