Foreign Company India Entry — Branch, LO, Subsidiary

A foreign company establishing a Branch Office (BO), Liaison Office (LO), or Project Office (PO) in India is governed by the Foreign Exchange Management (Establishment in India of a Branch Office or Liaison Office or Project Office or any other place of business) Regulations, 2016. Regulation 4 requires the application to be routed via Form FNC through an AD Category-I bank (or RBI directly for restricted-sector cases). Under the currently operative eligibility criteria, a BO requires minimum net worth of USD 100,000 and a profit-making track record in the preceding 5 financial years; an LO requires minimum net worth of USD 50,000 and a profit-making track record in the preceding 3 financial years. Every BO/LO/PO must file an Annual Activity Certificate (AAC) with its AD bank by 30 September each year.

Separately, under s.380 of the Companies Act, 2013, a foreign company establishing any place of business in India — including a BO, LO, or PO — must file Form FC-1 with the Registrar of Companies within 30 days of establishing that place of business.

Note: RBI issued Draft FEM (Establishment in India of a Branch or Office) Regulations, 2025 for public consultation, proposing removal of the net-worth and profit-track-record conditions above. As of this drafting, that proposal has not been notified in the Official Gazette, so the 2016 Regulations — including the USD 100,000/50,000 thresholds — remain the operative law; this should be re-checked before relying on it for a new application.

Foreign company India entry is the design and execution of a foreign company's first legal presence in India — the choice between a branch office, a liaison office, a project office or a subsidiary, and the registrations each requires. The framework: FEMA 1999 and the regulations on establishment of offices in India govern the branch, liaison and project office routes, while a subsidiary is incorporated under the Companies Act 2013 as an Indian company with foreign shareholding. The choice decides the foreign company's tax presence, its compliance load and its commercial flexibility.

The entry decision is a structure decision with three dimensions. The commercial dimension — what the Indian presence will do; the regulatory dimension — what the chosen structure may do under FEMA and the Companies Act; and the tax dimension — whether the presence creates a permanent establishment taxable in India under the Income Tax Act 1961 and the treaty. A liaison office may only carry liaison activities; a branch may carry the parent's business under its approval; a subsidiary is a separate Indian company with full commercial freedom.

The cost of the wrong entry structure is paid over years: an office that crosses into activities outside its approval is a FEMA contravention; a presence that creates an unintended permanent establishment draws tax; and a structure that cannot do the business the company wants requires a conversion later, with the taxes and registrations that conversions trigger.

This service is for foreign companies entering India. We advise on the structure fit — branch, liaison, project office or subsidiary — under FEMA 1999 and the Companies Act 2013, prepare and file the RBI and MCA registrations, set up the tax registrations and the permanent establishment position, and build the compliance calendar for the structure chosen.