Branch Office in India

A foreign company wishing to establish a Branch Office (BO) in India to undertake permitted commercial activities on behalf of its parent must apply under Regulation 4 of the Foreign Exchange Management (Establishment in India of a Branch Office, Liaison Office or Project Office) Regulations, 2016, using Form FNC, submitted to the Reserve Bank of India through an Authorised Dealer (AD) Category-I bank.

RBI approval for a Branch Office requires the foreign parent to demonstrate a minimum net worth (total of paid-up capital and free reserves) of USD 100,000, supported by its latest audited balance sheet, and a profit-making track record for the immediately preceding five financial years in its home country (relaxable where the BO is backed by a Letter of Comfort from a parent/group company meeting the criteria).

Once established, every Branch Office must separately register with the jurisdictional Registrar of Companies under Section 380 of the Companies Act, 2013, by filing Form FC-1 within 30 days of establishing a place of business in India, along with the RBI/AD bank approval, charter documents, and details of directors.

On an ongoing basis, the Branch Office must file an Annual Activity Certificate (AAC), confirming its activities remained within the RBI-approved scope, with the designated AD bank and the jurisdictional Directorate General of Income Tax (International Taxation) on or before 30 September each year, covering the preceding financial year.

Our engagement covers eligibility assessment against the USD 100,000 net-worth and profitability criteria, Form FNC application and AD bank liaison, Companies Act Form FC-1 registration within the 30-day window, and the annual AAC compliance cycle.

A Branch Office is the structure a foreign company uses to establish a physical presence in India to carry on its business activities, under the Foreign Exchange Management Act 1999. The framework is the Foreign Exchange Management (Establishment in India of a Branch Office or Other Place of Business) Regulations — under Section 6 of FEMA 1999, which gives the RBI the power to regulate capital account transactions — and the Branch Office may remit its profits abroad subject to the conditions of the approval. In parallel, the foreign company must also register with the Ministry of Corporate Affairs as a foreign company under the Companies Act 2013.

The Branch Office is one of the oldest routes for foreign entry, and it fits a specific profile: the parent is an overseas entity with a track record, the Indian activity supports the parent's business — liaison, sourcing, execution of contracts — and the parent does not want the full weight of an Indian subsidiary. The regulatory condition is that the Branch Office's activities must be confined to the business of the parent, and its expenses in India must be met from inward remittances or income legitimately earned in India.

The cost of entering India on the wrong structure is slow and painful: an entity that starts trading in India through an unregistered office, or a Branch Office that crosses into activities outside its approval, faces FEMA contravention proceedings and penalty exposure under the FEMA framework, plus the tax angle of a permanent establishment under the Income Tax Act 1961. Getting the structure right on day one decides how the first three years of Indian operations feel.

This service is for foreign companies establishing, converting or winding down Branch Offices in India. We advise on the Branch Office route against the alternatives, prepare and file the RBI application under the FEMA regulations, complete the foreign company registration under the Companies Act 2013, and set up the compliance calendar — FEMA filings, tax registration and the annual returns that keep the Branch Office lawful.