Branch office Registration

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What is Branch Office Registration?

Establishment of branch office /liaison office/project office or any other place or any other place of business in India by the foreign entities is regulated in terms of Section 6(6) of FEMA.
Branch Office means any establishment described as such by company – Regulation 2(d) of FEMA (Establishment in India of Branch or Liaison Office or Project Office or any other place of business ) Regulations 2016.

Why Incorporate Branch Office Registration?

The branch office registration gives a foreign company the right to operate as a legal business entity in India. The Branch Office can carry out similar business activities as conducted by the parent company in their Home-Country. Manufacturing Activities are restricted for the branch office.

Taxation

The profits earned by the foreign branch office is taxed @ 40% and applicable surcharges. In addition to tax and surcharges, the education cess @ 4% is levied. The branch office shall get GST registration if the aggregate turnover of  the branch exceeds the threshold limit or it may take registration voluntarily.

Annual Compliance

The branch office is required to file Annual Activity Certificate as at 31st March certified by Chartered Accountant along with the audited balance sheet within 30th September of the year. It is also required to file applicable forms with the Registrar of Companies, income tax return with the income tax department.

Registration Timelines
The estimated time period is 3 to 4 weeks. The time period varies from case to case.

Documents Required for Branch Office Registration

Documents Required From Foreign Company

  1. The attested copy (attestation from Indian Embassy/Notary Public in the country of registration) of the below documents are required:
    • Certificate of Incorporation
    • Memorandum of Association
    • Articles of Association
  2. Complete details of Directors and Key Executives of the company
  3. Full details of the shareholders of the applicant company
  4. Latest audited financial statement
  5. Net worth as per latest audited balance sheet certified by Certified Public Accountant
  6. A report from the applicant's banker in the Host country

Documents Required For The Office Address Registration

  1. 5 copies of passport
  2. 5 passport size photographs
  3. A copy of Business Visa with Immigration Stamp of arrival on it
  4. 5 copies of the National Identity Card
  5. Latest Address Proof (Electricity Bill/ Phone Bill/ Water Bill/ Bank Statement)
  6. Power of Attorney in the name of Authorised Representatives
  7. Board Resolution appointing the Authorised Representatives

Preparing Of Forms And Documents

  1. The applicant shall prepare the following documents:
  2. The board resolution for establishing the branch office in India.
  3. The declaration regarding the eligibility of FDI and source of fund.
  4. A declaration regarding the nature of the activity that will be undertaken by the branch office and its location.
  5. A declaration regarding the nature of the business activity and location of the business entity.
  6. Form FNC

Branch Office Registration by Process in India

Filing Of Application With RBI Through AD Bank
The application for establishing the branch office by the foreign company is submitted to the Authorised Dealer Category-1  Bank (AD Category-1 Bank) in the Form FNC along with the documents mentioned above. The AD Category-1 Bank shall verify the application and the documents submitted and if it is satisfied will grant approval for establishing branch office.

Forward of Form FNC to RBI by AD Category-1 Bank
The Form FNC and the details submitted by the applicant shall be forwarded by the AD Category-1 Bank to the  General Manager of RBI, CO Cell, New Delhi for the allotment of Unique Identification Number (UIN) to the branch office. After receiving UIN of the branch from RBI, the approval letter for the establishing branch office shall be issued to the applicant by the AD Category-1 Bank.
If the foreign company does not establish a branch office within six months from the date of approval letter, the approval shall cease to have effect.

Prior Approval from RBI in Special Cases
The AD Category-1 Bank forwards the application to the General Manager, RBI, CO cell, New Delhi for obtaining proir approval in the following cases:

  • If the applicant is a citizen of or having registered/incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau, Jammu and Kashmir, North East Region, Andaman  and Nicobar Islands.
  • If the principal business of the applicant falls under the sectors of Defence, Telecom, Private Security, Information and Broadcasting.
  • If the applicant is a Non-Governmental Organisation, Non-Profit Organisation, Body/Agency of Foreign Government.

KYC Verification Of Parent Company
Swift based verification is done i.e. a request for scrutiny of documents is sent to the foreign banker. If the KYC verification is done, the application is moved for the next level.
Approval of RBI for establishing Branch Office in India :- The approval is given based on the specific approval policy.

Registration Of Branch Office With ROC
The form FC-1 is filed with the ROC within 30 days of obtaining approval for establishing branch office in India from RBI. DIN for the Indian directors and DSC for the authorised signatories are needed for filing various forms.

Opening of Bank Account
After obtaining PAN from the income tax department, the branch office can open the bank account. Every branch shall obtain the Tax deduction and collection Account Number (TAN) to deduct and collect tax.

Import Export Code (IEC)
After opening bank account and obtaining cheque book, the branch office shall obtain IEC.

Why Choosing eAuditor Office for Branch Office Registration?

  • Core and Expertise Professional Consulting
  • Transparent Pricing
  • Real Time Online Processing
  • Expert Team
  • Nominal Fees

FAQ about Branch Office Registration

Following receipt of the complete set of authentic documents, the applicant company and the authorised signatory must draft the following documents for signature purposes. Resolution of the Board of Directors approving the establishment of a branch office in India The applicant made a declaration on FDI eligibility and funding source. A statement describing the nature of the business's activities and the location of the proposed Branch Office's activities. FNC form

The income tax rate on revenues earned by a branch office of a foreign company is 40%, with additional levies. GST is a tax that is levied on the sale of goods and services.

The time frame is predicted to be 3 to 4 weeks. It can, however, differ from case to case.

The branch office in India shall obtain PAN and TAN number. It shall take GST registration, if the aggregate turnover of the branch exceeds the threshold limit.

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